Beyond Binary

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.

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.