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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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July 2, 2008 10:11 AM

Microsoft selling Office on subscription basis for $70 a year

Posted by Benjamin J. Romano

Microsoft in July will begin selling a package of subscription services for consumers and small businesses, including the latest version of its widely used Office suite, previously only available for purchase as a one-time license.

The Equipt package, previously code-named Albany, will go on sale in mid-July at Circuit City stores. The price is set at $69.99 a year.

A big selling point is that the subscription-based Equipt service, which can be installed on up to three PCs, will automatically give customers the latest versions of Office and Microsoft's security offering, OneCare, which is already sold as a subscription service.

Here's a screenshot of the Equipt welcome screen, from Microsoft:

Mary-Jo Foley has this analysis of the competitive strategy behind Equipt:

"As I've said before, Microsoft isn't positioning Equipt/Albany (at least not publicly) as a competitor to Google Docs. But to me, the bundle is definitely aimed at a key constituency that is looking at Google Docs --- namely students and home-office types. Unlike Google Docs, Equipt comes with a PC-based version of an Office suite, as well as a security service. But Google Docs, unlike Equipt, is free...."

How does Equipt pencil out against the Microsoft products it includes, purchased individually under the current pricing model?

Office Home and Student 2007: $149.95; Windows Live OneCare: $49.95 per year; Office Live Workspace: free; Windows Live Mail, Messenger, Photo Gallery, Writer, Toolbar, etc: free, free, free, free, free; (Microsoft essentially gives away these services so that it can sell advertising against the audience of people who use them.)

Equipt is a better deal unless you plan to stick with Office Home and Student 2007 for at least eight years. At year eight, your total subscription costs would hit $559.92 compared with $549.55 if you had purchased Home and Student in year one and subscribed to OneCare every year.

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