Microsoft is introducing the subscription versions as part of its move toward selling software as an online service rather than in boxed packages. That shift would mean a dramatic change in the way Microsoft earns revenue. Even before the technology is ready to deliver subscriptions online, the Redmond software giant wants to experiment with the new revenue model. Hence it will now begin to sell subscriptions to packaged products.
Microsoft is citing non-subscription prices in Australia for Office XP Professional of AU$749 (US$388) for customers upgrading from Office 2000 - that's most customers - and AU$1,288 (US$668) for first-time buyers. Those who want to buy on a subscription basis will pay AU $359 (US$186) per year for Office XP Professional Subscription. As a special offer for the launch, Microsoft is also offering a rebate of AU$60 (US$31) on the subscription version through the end of August.
"We have listened to what our customers want here in Australia and are pleased to be the world leader in offering a software subscription," said Mark Linton, Microsoft's Australia office product manager, in a statement.
This pricing sets the cost to current Office users at a level equivalent to an upgrade every two years. That may not be a very competitive package, given that many users today are still happy to use Office 97. For first-time buyers, it's certainly a more attractive deal.
In the U.S., Office XP Professional Microsoft is citing an estimated retail price of $579 for first-time buyers and $329 for upgrades. This is roughly in line with current pricing for Office 2000.