Fee for Microsoft Office Beta Could Signal Strategy Shift

Microsoft is going to start charging users who download its Office 2007 Beta 2 version US$1.50, starting August 2. The application, which has been downloaded by some 3 million people over the last two months, has been available for free.

Microsoft said it was surprised by the interest in beta 2 and decided to implement the fee to recover costs. However, users can still access the online test drive of Office 2007 through a Web browser for free.

Along with postponing the launch of its new Vista operating system, Microsoft has pushed back the Office 2007 release date. Office will be available to business customers in late Fall, the company said. Meanwhile, retail and OEM (original equipment manufacturer) availability is set to coincide with Vista’s release, now scheduled for January 2007.

New Model

Charging developers a fee — even a nominal one — to test a beta product is highly unusual, JupiterResearch analyst Joe Wilcox told TechNewsWorld. The cost of delivering a beta is marginal. More importantly, Microsoft is the primary beneficiary of the arrangement, as the feedback it receives from developers allows it to ultimately deliver a better product.

However, there is not much chance that a backlash among developers will form, given that so many have already downloaded the application for free.

Microsoft’s decision to start charging users for downloads of the beta version of Office is likely more than just a tactical decision to pick up extra dollars. It could be another sign that the company is serious about embracing the online subscription and Internet delivery model for software.

“It’s actually a very big step for them,” said Matt Booth, senior analyst with the Kelsey Group. “Their overall strategy is to convert existing software to Web-delivered services,” he told TechNewsWorld. “This is not just about Office. There are a lot of other products where this strategy could make sense — Xbox and mobile phone applications for instance.”

CRM Live

Indeed, Microsoft is pushing its Dynamics CRM product suite onto the Web, with the introduction of its own software-as-a-service application next year. Called “CRM Live,” this product will be written on the same code base as earlier versions of the on-premise application and the hosted offerings of its partners.

By offering these versions on the same platform, companies can jump from one deployment mode to another, depending on their needs.

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