Prepaid Office to go
The software maker, which has a market capitalisation of US282bn (in SA currency that’s R2trillion), will begin selling its popular Office suite of PC applications on a prepaid basis in SA from July. The initiative, which is also being launched in Romania and Mexico, is meant to increase the penetration of Microsoft software in these markets and combat high levels of piracy.
Of course, selling software on a prepaid basis could also help Microsoft counteract the growing menace of open source software, specifically OpenOffice.org, a free office suite backed by long-time rival Sun Microsystems. OpenOffice.org is not as full-featured as Office, but it is a competent alternative for basic word processing, spreadsheet and presentation tasks.
Microsoft’s new system will work in a similar way to prepaid cellphone vouchers. When consumers purchase a new PC, they will be given the option of purchasing the software upfront or paying for use of it on a quarterly basis, using prepaid vouchers. The vouchers will not be available to consumers not purchasing a new PC.
When consumers buy an Office starter pack, they will be given a pass code to unlock the software for three months, and another pass code to use the software free for a further three months. Thereafter, they will need to purchase additional vouchers each quarter.
The cost of the software is R199 for the starter pack (six months’ use) and R199/quarter thereafter. So, the first year’s use of Office — it’s the 2007 Professional version with the Microsoft Access database included — will cost R597. Year two will cost R796. The retail price of Office Professional is about R5800 and pre-installed it’s about R3100.
So, consumers who use the prepaid model for longer than four years will end up paying more than they would have if they’d simply forked out the cash upfront for a regular Office-equipped PC. Microsoft SA has piloted the programme with three local system builders: PC Zone, Matrix Warehouse and Chaos Computers.
Neil Holloway, president of Microsoft in Europe, the Middle East & Africa, says the intention is to expand the programme to other developing countries over time. He downplays a suggestion that Microsoft was forced to launch the prepaid Office programme in response to open-source rivals. “People are more likely to use an illegal copy of Office than a legal copy of OpenOffice,” he says.
“Fundamentally, it’s all about the cost of the software. If you can spread that cost, and pay a smaller amount on a quarterly basis, psychologically it seems a lot easier to accept.”
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