Windows and Microsoft Office rental: Much less than meets the eye

The news that Microsoft for the first time is allowing people to rent Windows and Office sounds at first blush as if it's a big change in Microsoft's business model. But that's not at all the case: Microsoft is merely allowing some businesses to do what they've already been doing illegally for years. Most people will still have to pay full freight.

The new Microsoft plan is not a way for ordinary users to rent a copy of Windows or Office rather than buy a full version. Rather, it's a way to allow businesses such as Internet cafes and hotel and airport kiosks to sell access to Windows and Office as part of the services they provide. These businesses already do this, of course, but they've been doing it illegally. Here's what the Microsoft says about on its "Microsoft Rental Rights Licensing" page:

Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party. As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafes, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements.

Rental Rights are a simple way for organizations to get a waiver of these licensing restrictions through a one-time license transaction valid for the term of the underlying software license or life of the PC. Solidify your role as trusted advisor by helping your customers become compliant using an additive license that fits their business model --- without requiring special tools, processes, reporting, or paperwork.

In short, businesses such as Internet cafes can now buy a copy of Windows or Office, and then rent it out to those who pay to use computers there. That's been happening for years but illegally. Microsoft is merely putting in place a legal way for businesses to do it.

This makes life easier for Microsoft. No longer will it have to target these kinds of businesses for software piracy -- not that it's been doing that seriously, anyway. Allowing businesses to rent out out Office and Windows may bring in new revenue, though, because it's likely that at least some of those businesses that have been renting out Office and Windows had previously pirated the software. The businesses knew that they were violating the terms of their software agreement, so why bother to buy a copy to do something illegal? Now they can buy a legit copy, and legally rent it out.

Companies that want to rent out Office and Windows only have to pay a one-time fee, not an annual fee, so it will be an affordable option for them. Making it less expensive is that Microsoft has launched a promotion to cut the fee until June.

Is this a good idea for Microsoft? Certainly. Microsoft may now get revenue from people who previously pirated their software, and it won't have to spend as much time on tracking down pirates.

Will this change the way most people buy Windows and Office? Not for the foreseeable future. They way you paid for Windows and Office a month ago is the way you pay today, and the way you'll pay tomorrow.

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