Software as a Service - Microsoft Equipt Flopped Like a Fish Out of Water

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Update: Feb. 18, 2009. Microsoft yesterday, in an email, told all subscribers of the Equipt software-as-a-service bundle that the product was to be discontinued after April 30, 2009. Equipt, in retrospect, always had that slightly experimental feel, or that feeling that events were moving faster than anyone at the time knew. Windows Live OnCare, which had been a part of the bundle, was discontinued last November with Microsoft saying that a free antivirus program would replace it sometime in 2009. It also doesn’t help that the wagon that Microsoft hitched this particular star to was the now-defunct Circuit City.

From a statement in the Microsoft Equipt FAQ:

Microsoft is offering eligible Microsoft Equipt subscribers a prorated refund for unused months of their subscription. To make sure that eligible subscribers have full use of Office after Microsoft Equipt is discontinued, they will also receive a free CD of Microsoft Office Home and Student 2007. You will be able to install Microsoft Office Home and Student 2007 on up to three computers. To receive your prorated refund of Microsoft Equipt and a free copy of Office Home and Student 2007, you must complete the Microsoft Equipt refund form located on the Microsoft Equipt Subscriber Center.

Microsoft Equipt is a new option for PC buyers and other users wanting to use Microsoft Office products at home. Directly aimed at students and those who need to share and work on Office format files at home, it’s a one-year software subscription that is licensed for up to three PCs. It includes Microsoft Word, Excel, PowerPoint, OneNote, and Windows Live OneCare. The license is only for “non-commercial use by households.”

Shrink-wrapped copies of Microsoft Equipt have been available at nearly 700 Circuit City stores since mid-July 2008. The software sells for $70.

So what does the home user get with this subscription?

Word, Excel, and PowerPoint bring the standard and familiar word processing, spreadsheets, and presentations. OneNote is a paper notebook-like application that provides note-taking and search/retrieval for information you enter. Windows Live OneCare is a PC-management, security, and anti-virus application that is itself normally sold as a subscription.

Let’s compare the $70 per year subscription price for these applications to some “on the street” prices for purchasing these applications separately. currently lists a one-year subscription to Windows Live OneCare for $29.99. Office Home and Student is $115.99 and includes Word, Excel, and PowerPoint. It has the same three-PC license for household use only, but it’s perpetual rather than limited to one year. OneNote is listed for $70.99.

So it would take about $220 to purchase the software separately. Doing that, however, gets you a permanent license for Office Home and Student that can be used on three PCs in your house.

Microsoft also provides a unified installer for Equipt. This means that you don’t have to install the applications one-by-one. All the applications obtain updates as one, too, through Windows Update.

Office group product manager Bryson Gordon said, “With Microsoft Equipt we’re improving our customers’ computing experience by giving them essential software in a package that offers an easy install and setup experience, as well as a convenient and affordable way to stay updated with the latest versions of Office and Windows Live OneCare.”

Who might be a good match for this subscription model? A household with kids in school, a home PC, and one or two laptops might be a good match. Such a user might be less concerned with the more business-oriented features found in other versions of Office (like Outlook, Access, and Microsoft Publisher) and might appreciate a single-point installation and the convenience of automatic updates on each PC. Also, Equipt extends the license for OneNote and OneCare to three machines. This is not provided in the license these applications when purchased separately – they’re licensed per machine.

In keeping with the intended audience, Microsoft also includes such online activities as Windows Live mail, messaging, and photo sharing. Of interest is Office Live Workspace, a service that allows you to share (and backup) your files online.

Of course, these services are available free for any licensed Office user, but one has to sign up for them separately.

No one knows if the public will embrace software as a service and the subscription model. One might guess that Microsoft is hoping that many more home users will spend $70 per year than a couple of hundred dollars every four or five years, especially if the subscription gets the latest versions of the applications on three different machines. Equipt is another way to reach out to home users, but will it take business away from Microsoft’s core Office business users? That’s the question.


Microsoft Press Release about Equipt

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