SUBSCRIBING TO THE FUTURE

Microsoft is planning to go to a subscription service for its software instead of selling boxed packages. Other companies have already gone this route and it’s almost certain to become nearly universal.

The reasons for going this way are compelling and you don’t have to be head of the math class to figure them out. Selling a program for $200 or $300 or whatever the price, is a one-time deal. Sell the same program as an online subscription for $10 a month, or even less, and you get more money over time and have almost no costs upfront. Since most people use the same software for years on end, the program that used to sell for $200 will end up costing the buyer thousands..

For the producer it’s all golden. Gone are the manufacturing and packaging costs, warehousing and delivery, plus the salaries and ancillary costs for the people employed in doing those tasks. The money coming in for subscriptions is nearly all profit. There is one other big benefit to the subscription system for software and it is an important one: it ends software piracy. A major producer like Microsoft loses an estimated 15-20 percent of potential sales to pirated copies. Those days will be over; if there are no disks, there are no disks to copy.

Success is pretty much assured: Game companies have been selling playing time subscriptions for several years. The success of virtual worlds like “Second Life” shows that there is subscription gold in other online ventures; and visitors to Facebook can find hundreds of small free applications written just for the fun of it by users.

If the thought of paying several thousands dollars over the years just to get a few basic programs for office work leaves you a little appalled, fear not: there are lots of good programs that won’t cost you a dime.

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