Microsoft has announced a new subscription licensing model for the next version of Microsoft Office, code-named Office 10. In a preview of the company's future revenue model, Microsoft will give customers a choice among three purchase versions: a traditional nonsubscription retail version, a new subscription version, and a version called Office Online, which targets the application service provider (ASP) market.

The subscription version of Office 10 will cost significantly less than the retail version and will function fully for 1 year. Customers can renew the annual subscription over the Internet, over the telephone, or at a retail store. Microsoft expects this new option to be a big success, especially with individuals.

"We're really excited about this," Microsoft Office Product Manager Lisa Gurry told Windows 2000 Magazine. "For our home users and small-business users, this is a great way to get Office at a significantly lower cost." Gurry noted that Microsoft hadn't yet set the price for the Office 10 subscription but that "we're going to make it very attractive. We know that it has to be appealing for this \[option\] to be successful."

By lowering Office 10's entry cost, Microsoft hopes the product will attract users who otherwise might balk at upgrading. Gurry noted that Office 10's renewal price will equal its initial subscription cost; at renewal time, users will be able to easily change—at no additional cost—to a different Office version (such as Premium or Professional) if they need more or less functionality than their original subscription provides.

Customers who decide not to renew the product will be able to use Office 10 to view and print existing documents after the subscription period runs out. However, they won't be able to modify documents.

Gurry and Lead Product Manager Tom Bailey were understandably excited about the new product, which should ship in mid-2001. "A lot of the functionality in Office 10 is designed to more easily expose the technology that's already available," Gurry noted. "Features like Smart Tags and the Task Panes are designed to make it easier to get at functionality. The ability to just work smarter is really resonating with our users and testers." Bailey agreed, adding, "We're melding the new with the old. \[In addition to the new subscription licensing,\] Office 10 is also delivering new features, such as ... reliability enhancements and voice dictation and command capabilities."