Microsoft Subscription Computing Targets 20 Million

A Microsoft program aimed at making PCs and Internet computing more affordable through monthly payments will deliver 20 million new desktops and laptops over the next few years to people who may not otherwise have been able to afford them, an executive said.

The subscription computing program has already seen 2 million PCs deployed since it started nearly three years ago, said Javier Arrupea Gitlin, the head of subscription computing at Microsoft.

The company has teamed up with over 40 partners in 33 countries around the world, mainly mobile phone and Internet service providers, on the program.

The idea came about as part of Microsoft's efforts to spread computing to every corner of the world, including developing nations. But the world's largest software maker found that programs aimed at the poorest of the poor didn't make sense in countries further along in development, while traditional ways of selling new PCs kept them out of reach for many consumers.

Then the idea for subscription computing was born, and Microsoft's partners say it's not only driving computer sales, but also interest in mobile Internet computing.

"We believe this is the most affordable way to get a PC and Internet bundle in Lithuania," said Tadas Jackus, a communications manager at mobile network operator Omnitel. His company has worked with Microsoft since late 2005 and has sold 65,000 units through the subscription computing program.

Omnitel customers can buy a laptop or netbook at an initial price of €0.30 (US$0.38) and then pay a fixed monthly fee that includes mobile broadband Internet access for between €23 and €55 depending on the device and the data plan, he said.

Netbooks, in particular, have sparked new interest in subscription computing and Microsoft's partners are scrambling to offer new devices and packages.

"We are looking very much to netbooks as enablers for mobile broadband services and our portfolio has included Asus Eee PCs since July this year," said Silviu Petricescu, a product manager at Vodafone Romania. "Moreover, the Vodafone branded laptop which will be soon available for our customers is also a netbook device."

Omnitel is also offering Asustek Computer's Eee PC with built in 3G (third generation mobile communications) modules in Lithuania. A mobile data plan for heavy users and the Eee PC subscription costs €23 (US$29) per month.

Both companies sell regular laptops, including the Sony Vaio and Apple's MacBook, that range in price from US$400 to $2,600 without a subscription.

Petricescu credited Microsoft with helping move Vodafone Romania quickly into the subscription computing program by building its understanding of the PC market, training sales representatives and aiding in marketing campaigns.

The company started the subscription programs in May, offering a range of devices with mobile data packages costing from €9 to €27 per month for 12 to 24 months, including unlimited data traffic.

The program has caught on so well in some areas that Microsoft plans to pour more resources into the program.

The company will launch a new e-learning portal later this year for subscribers, to offer software training. The portal will start out as a pilot program to see how people and partners respond.

The new Web site is one of many initiatives designed to draw people to computing and attract new partners for Microsoft. Gitlin said over a dozen new partners have signed on with Microsoft over the past month.

"This is taking off very nicely," he said. "But at 2 million units we've just scratched the surface."

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