Last week, Microsoft received approval for a patent for technology to meter software use and access to specific computer hardware. Why would they want this? Microsoft wants to introduce a “metered pay as you go” licensing model.
The new model would include fees that would be charged again as a prepaid or billed account for software and services. We believe that Microsoft is moving in this direction for several reasons; one being that their traditional licensing model is in trouble, CIOs are smarter about licensing and upgrading than they ever have been and are going to cut costs wherever possible. Look at companies like Salesforce.com and even telcos like Time Warner and Verizon, they have loyal customers that pay on a monthly basis for services – Microsoft has its eye on this model moving forward, they want constant income and locked-in customers.
Introducing a metered model will also allow Microsoft to bring Software as a Service (SaaS) models to consumers by charging usage for such tasks as word processing and web browsing. Microsoft needs a model like this to make a bold move in a technology market where Google is becoming the dominant player. They are hoping this will be there saving grace for new revenue streams and domination for the company once again!
Offering the option for companies to pay for only what they use sounds like a good idea to me, paying for web browsing and word processing by use on the other hand scares me a little. We’ll see if companies and consumers are actually saving or if this is going to hugely increase expenses once this model is offered I guess…