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Will You Have to Feed the Office Meter?

Tired of those cheesy rent-to-own ads that offer everything from dining room sets to bedroom suites, or even new PCs for “low, low” prices? Get ready for the Microsoft version – with a twist. On Christmas day, Microsoft filed a patent application for a “pay-per-use” PC hardware and software rental model that would let a […]

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SJJ

Stuart J. Johnston

Dec 30, 2008

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Tired of those cheesy rent-to-own ads that offer everything from dining room sets to bedroom suites, or even new PCs for “low, low” prices? Get ready for the Microsoft version – with a twist.

On Christmas day, Microsoft filed a patent application for a “pay-per-use” PC hardware and software rental model that would let a vendor charge users for the amount of computing power and the software that they actually use on a metered basis.

Each PC implementing the pay-per-use model would include a “metering agent” that tracks use of the machine and software, as well as a security module that keeps the rental and billing models secure, according to the application.

The move appears to be yet another attempt to figure out how to evolve traditional PC and software sales models to better match the needs of the marketplace.

In its filing, Microsoft (NASDAQ: MSFT) presented multiple scenarios for how the technology might be used. For instance, a vendor might offer users different options – in Microsoft’s examples, these might include packages for business productivity, gaming, and browsing.

The productivity package might include a three-core processor, of which the user licenses the use of two cores, as well as the use of the software. If the user’s needs change later, that could be upgraded to enable use of the processor’s third core. Or a user might upgrade the browsing bundle to a faster network option.

While Microsoft’s attorneys only gave examples of how pricing might be applied, not firm plans or solid numbers, the application did state that the pricing model might be “per-bundle and by duration.”

“The Office bundle may be $1.00 per hour, the gaming bundle may be $1.25 per hour and the browsing bundle may be $0.80 per hour. The usage charges may be abstracted to ‘units/hour’,” according to the patent application.

The business model outlined in the patent application would run counter to today’s most common sales model, where the user purchases a PC and the licenses for software have no limitations on use.

“For hardware and software manufacturers and resellers, [the current] business model requires more or less a one chance at the consumer kind of mentality, where elasticity curves are based on the pressure to maximize profits on a one-time sale, one-shot-at-the-consumer mentality,” the application states.

“Rather than creating highly customized, but still overbuilt, computers for an individual user, a standard model can be created …. Because the computer user is only charged for the performance level and features actually used, the user can select to modify the performance to suit his or her needs and budget,” the application continues.

True, Microsoft’s application concedes, “the cost of ownership over the life of the computer may be higher than that of a one-time purchase, [but] the payments can be deferred and the user can extend the useful life of the computer beyond that of the one-time purchase machine.”

This article was first published on InternetNews.com. To read the full article, click here.