Microsoft Announces Subscription-based Office

Microsoft has officially confirmed its plan to offer the Office package to the public on a subscription basis.

It follows the testing programme, codenamed Albany, which we reported in April. The scheme, renamed Microsoft Equipt, launches in the middle of July.

Surprisingly, the deal will initially only be available at Circuit City stores. However, Microsoft says it's not an exclusive agreement and they may distribute it through other routes later on. (Source: betanews.com)

The package will cost $70 a year, which is about what analysts tagged as a fair price in comparison to the prices for buying the software outright. There had been speculation Microsoft may have opted for a lower price on the grounds that it would boost take-up enough to make for higher revenues.

Equipt includes Microsoft Office Home and Student 2007 (the main programs being Excel, Word and Power Point), plus the OneCare security service. The box also includes Live Workspace and Windows Live tools, though these are already available without charge. The subscription covers up to three machines in the same home. (Source: arstechnica.com)

Currently, OneCare costs $50 a year, while this edition of Office retails at $150. That means the Equipt deal works out cheaper than buying the package over two years. At the three year-mark, somebody with a single machine who doesn't want the OneCare service would be worse off.

Assuming you would have subscribed to OneCare anyway, it will take six years before Equipt becomes more expensive. However, subscribers automatically get any updated editions of the Office software, and it's pretty much guaranteed there will be one, if not two new editions during this time.

The big question now is whether people see the new package as good value and, if they don't, how low Microsoft would be willing to go on an Office-only subscription.