Today marks the end of the upgrade era. It may take a while to sputter out, but if Microsoft gets its way--as so often happens--there will never be another application upgrade like Office XP. And as we wave goodbye to big upgrades, we'll welcome its replacement: Smaller upgrades and software by subscription.
Microsoft has already said it wants to move to a subscription model--under which customers "buy" the right to use software for a certain period of time and get "free" upgrades during that time.
SUBSCRIPTIONS ARE GOOD FOR MICROSOFT because upgrades don't matter nearly as much as they used to, as witnessed by the lengthening of customer upgrade cycles. The differences between Office XP and whatever you are using now are mostly cosmetic and in improved ease of use.
Yes, these changes matter, but it's not like XP makes Office tremendously more useable than it is already. Nicer, yes, but this is an upgrade you don't have to buy--though people running something before Office 2000 should seriously consider upgrading. Changes do add up over time.
Still, Microsoft can't count on the upgrade revenue it once enjoyed yet still needs to invest to support .Net. This project, along with Web services created by other companies, are an attempt to fundamentally change how people and computers interact. Microsoft needs money to finance .Net and its many other projects. So Redmond is turning to subscriptions and is cracking down on piracy to protect its cash flow.
THE SUBSCRIPTION PLAN WAS SUPPOSED to start in the United States this year, but has been delayed while additional "testing" goes on overseas. Read: Microsoft hasn't figured out quite how to make this palatable and is using foreign markets for taste-testing by consumers and small businesses before making its play here. When Microsoft announced the delay, some people thought--mistakenly--that Microsoft was backing off. I don't think so, though we may get a reprieve if the current push to move big corporate customers to subscription-like licenses hits the rocks.
3%
2%
