The welcome screen for the new Equipt offering lists the products and services available.
(Credit: Microsoft)If you are looking for "Albany," you might want to try heading to Circuit City.
Microsoft on Wednesday announced that Circuit City will be the first to offer a new Office subscription service, first known by its Albany code name and now dubbed Equipt.
The idea behind the subscription service is to convert more new PC buyers into Office buyers. It plays on the fact that although most people don't buy Office at the same time as a computer, many do purchase a security software subscription.
Microsoft is trying to tap into the fact that while many people would rather find a copy of Office that they don't have to pay for (either an older version or a pirated copy) they are willing to pay for security software. "Security is basically the No. 1 thing that gets attached with a PC," said Microsoft group product manager Bryson Gordon.
Equipt bundles a subscription version of Office Home and Student with Microsoft's OneCare antivirus product for $69 a year--just $20 more than the suggested price of OneCare alone.
On the main page of the Equipt subscriber center, users can see their subscription status and make changes to their account.
(Credit: Microsoft)Gordon said some less sophisticated users think they are getting a copy of Office as part of their PC purchase and are disappointed when they come home and find only a trial version of Office. "That's when a lot of folks will start digging through the drawer for (an old copy)."
Although Equipt is starting out at Circuit City, the deal is nonexclusive and Gordon sees options to go beyond stores and beyond the U.S. Gordon said Microsoft expects to expand to other retailers later in the year and eventually to offer it through other means, such as through computer makers or over the Web.
In addition to placing Equipt on retail shelves, Microsoft is also looking for it to be installed by so-called tech benches, the generic name for things like Best Buy's Geek Squad.
Also, for now at least, there is no way to upgrade from a OneCare subscription to Equipt, though Gordon said that may be in the cards.
"It makes a lot of sense so it's something you will likely see," he said.
I was curious just how Microsoft accounts for the revenue it expects to get from Equipt--i.e., how much gets counted toward Office and how much toward OneCare. Gordon wouldn't say, other than to indicate it would be wrong to think that the Office unit only gets the $20 difference between Equipt and OneCare.
Gordon said the company's research indicates that those who opt for Equipt will be people who would not otherwise buy Office, but added "we are going to keep a very close watch on cannibalization metrics."
Updated 4:15 p.m. with details on the countries in which Works SE is being offered.
After years of exploring the matter, Microsoft has finally started offering an ad-funded version of Microsoft Works in some countries.
Users who run the software see a small ad as they are writing their document or editing their spreadsheet. Although the program has the ability to update its set of ads online, today it runs mostly ads for Microsoft and a few partners, all of which ship with the product itself.
Works SE (which stands for Sponsored Edition) is free to PC makers, though they don't get a cut of the ad revenue. Large computer makers typically only pay a buck or two for the low-end version of Works, though.
The ad-funded Works falls into a category of several products the company is exploring, rather than a significant new source of revenue, said Microsoft Vice President Chris Capossela.
"This is a trial," he said. "This is a pilot. This is a 'Can we build software that will do this?' "
Microsoft has been considering such a product for some time, with many inside the company arguing that Microsoft could make significantly more money for Works by selling advertising than it gets in revenue from computer makers for the product.
Capossela said the early response to the free product has been positive. "People have liked the price," he said with a laugh, adding that it has also not been perceived as that intrusive, something Microsoft had worried about.
Last August, Microsoft said that it
Microsoft remains cagey on the details of where you can find Works SE. The company has been testing Works SE in 5 countries: The United States, France, Canada, Poland and the United Kingdom. It is available only through select computer makers and Microsoft won't say which computer makers those are.
According to its Web site, Packard Bell offers the software on some of its models in the United Kingdom. Using the same sleuthing technique (a search engine), it appears Sony is one of those offering it in the U.S.
Capossela put Works SE in the same category as several other new approaches, including the Albany subscription service that Microsoft detailed this week. Also in that camp would be the prepaid Office cards that Microsoft has been selling in some countries for more than a year now.
Response to that last product, which sells Office in six-month increments for around $20, has been mixed. The cards were a hit in South Africa, but bombed in Mexico.
None of these areas are significant new channels as yet.
"There's no business here yet," he said. "These are all experiments."
The one area where Capossela said Microsoft has seen significant sales is the download and purchase of Office over the Web. Customers either download a trial version of Office directly from Microsoft or get it with a new PC. After 60 days of use, they are prompted to buy a full version from Microsoft or a partner (partners typically sell the product cheaper than Microsoft).
Microsoft was not quick to seize on selling directly over the Web, Capossela said.
"We're late," he said. "If you look at Symantec and Intuit, they have huge businesses here."
Capossela also stressed that Microsoft is focusing its efforts on new ways of selling Office and creating online products that complement Office, not replicating the suite on the Web. He said that Microsoft still doesn't see much competition from Google Apps.
"We haven't seen them yet," he said. "We've seen a love affair in the press. We haven't seen customers embracing Google Apps."
As for Albany, Capossela said the main idea is to try and have a product that can be pitched by the Geek Squads of the world when people buy a new PC at retail. Tech benches, as these services are known generically, have become an important avenue for consumer software sales.
"This is designed for a certain sales motion and if that sales motion didn't exist, this product probably wouldn't exist," he said.
That said, Microsoft has yet to sell the product to those retailers or determine how much it will charge for the subscription product, which combines Office 2007 Home and Student Edition, Windows Live OneCare security, and other free Windows Live services.
Have you seen the ad-based Works on a PC? If so, drop me a note at ina dot fried at CNET dot com and let me know which model.
Microsoft confirmed that it is planning a subscription service that combines the consumer version of Office with its OneCare security suite.
Code-named Albany, the product has a single installer that puts Office Home and Student, OneCare, as well as a host of Windows Live services, onto a user's PC. As long as users keep paying for the subscription, they are entitled to the latest versions of the products. Once they stop paying, they lose the right to use any version.
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The product is aimed at consumers that want a simple way to have access to Microsoft's productivity suite and keep their computer protected, Microsoft said.
"There is a customer segment that really enjoys this always-on, always up-to-date aspect of the service," Microsoft group product manager Bryson Gordon said.
Microsoft is planning to introduce a limited beta version of Albany in the coming days, with the aim of launching the product commercially sometime later this year, Gordon said. The company still hasn't decided on how much it will charge or how the product will be sold, he said.
In talking about the product, Microsoft did not refer to Google Docs by name, but I have said a subscription product might be Microsoft's way of trying to find a more palatable way of charging for Office amid stepped-up competition from free and online rivals.
By tying the Office subscription to OneCare, Microsoft is linking the purchase to one of the few areas where consumers have shown a willingness to pay for software--security. In this way, Microsoft can make the pitch to those buying security software that, for some extra dollars, they can always have the latest version of Office as well.
Those who subscribe to Albany will also get several free Microsoft products pushed onto their desktop--including online document-sharing product Office Live Workspace, Windows Live Messenger, Windows Live Photo Gallery, and Windows Live Mail.
Gordon argued that having all the products installed at one time is seen as a plus by the segment targeted by Albany, but he agreed that some users may not be interested in having so many Microsoft products foisted upon them. Office and OneCare will continue to be offered in traditional ways, he added.
Other products may be added in over time, he said, and Microsoft could also try the Albany approach for other market segments, such as small businesses.
Microsoft has been tight-lipped about the "Albany" product that it has just started testing, but ZDNet blogger Mary Jo Foley hears it might be a consumer bundle that includes Windows Live OneCare, Office Live Workspace, and Office Home and Student Edition.
The product, which apparently also goes by the name "ValueBox" may be an attempt to beef up the consumer version of Office amid stepped-up competition from Google Docs and other free and online competitors.
It strikes me, though, that Microsoft may be looking at ways to protect the Home and Student version of Office, a product that has been a huge seller at retail ever since its introduction as the Student and Teacher version back with Office XP in 2001.
Since Office Live Workspace is already free, the main addition to the Office box would be Windows Live OneCare, Microsoft's consumer antivirus product. Although it carries a $50 list price, it can often be had for far less either at retail stores or online. How much this would add to the product's appeal is unclear, though antivirus is also one of the biggest areas where consumers shell out for boxed software.
Microsoft has confirmed that it sent out invitations seeking testers for Albany, but has declined to offer any details about the product.
The testing of Albany, though, is not occurring in a vacuum. The company had previously said it was looking into the possibility of an advertising-funded productivity suite based on its Works franchise. Some inside the company have been pushing that approach for some time.
Microsoft may, however, now be rethinking whether it makes sense to have two separate productivity suites for the home at all.
Works has historically been a separate product from Office, although Microsoft has at times brought the two products closer together. One bundle of the product, known as the Works Suite, includes an older version of Word as part of the product, along with Works' separate tools for things like databases and spreadsheets. Microsoft has not updated Works substantially in some time, with the product overdue for either upgrade or replacement with Office Home and Student, were Microsoft to go that route.
Any decision on the future of Works would have to look beyond the retail channel, however. Although Office Home and Student is the big seller on store shelves, Microsoft has historically used Works as a product that computer makers can pre-install on new machines, though such deals generate only a couple of dollars for Microsoft. These days, new PCs also come with a trial version of Office. With direct sellers like Dell, Microsoft also has an option called Office Basic that includes Word, Excel, and Outlook.
Microsoft confirmed Friday that it has started testing for a product code-named "Albany" but would not offer further details on the product, which may or may not be its ad-funded version of Works.
ZDNet's Mary Jo Foley posted a report earlier Friday saying that Albany is a consumer product in the Office family. She didn't get anything concrete out of Redmond either, but has some informed speculation of what it might be.
Microsoft said last year that it plans to test an ad-funded version of Works, following several years of exploring the idea. However, it is unclear whether Albany is in fact that product.
The software maker already has its Office Live Workspaces product which lets people store and share office documents online, but unlike Google Docs and Spreadsheets, does not allow documents to be edited online.
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