Microsoft Adds Subscription Model for Office

Source: Microsoft

Microsoft (NASDAQ: MSFT) plans to introduce a new way to sell its Office software suite on Wednesday, offering customers a subscription model instead of the traditional one-time license fee.

Starting in mid-July, the company will offer U.S. consumers Microsoft Equipt, which comes packaged with the latest version of Office, Windows Live online services and security software.

Equipt, which was introduced under the code-name “Albany,” will be available for $69.99 a year and it can be used on up to three home computers, according to Microsoft. The product will be available at around 700 Circuit City (NYSE: CC) stores.

By getting a subscription service, customers can get the latest updates and newest versions of the software. The regular price for a one-time license of Office 2007, home and student edition, is $149.99, according to Microsoft.

The company faces competition from Google (NASDAQ: GOOG) and several startups, including privately held Zoho, which offer applications comparable with Office but delivered through a Web browser for free or a monthly subscription.