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Microsoft Tries Pay-As-You-Go Approach For Windows PCs

malebolgia   on 22 May 2006 - 20:48 · 68 comments & 47199 views

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While Microsoft's Windows operating system and software is popular worldwide, its relatively high price puts it out of the financial reach of many in the developing world. As a result, pirated copies of Windows and Office are endemic in some parts of the world, with the percentage of PCs running pirated software approaching 90 percent in some countries.

Microsoft is trying a novel approach to deal with the problem of affordability: a pay-as-you-go model. Dubbed FlexGo, the plan operates much like a prepaid cellular phone. Consumers buy a FlexGo computer running Windows XP Home at a reduced price from a retailer, along with some prepaid access cards.

Under the FlexGo model, usage is timed. As PC usage reaches a predefined limit, the computer goes into a limited-access state until more time is added. Users can add more time by purchasing scratch-off prepaid cards and entering the numeric code contained on the card onto the PC. The process repeats until the PC's owner has purchased a predefined amount of time on the PC. Once that occurs, all usage restrictions are lifted as the user now owns the PC outright.

News source: arstechnica

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(5 replies) #1 Computer Guru on 22 May 2006 - 20:50
I was hating it until I read
"The process repeats until the PC's owner has purchased a predefined amount of time on the PC. Once that occurs, all usage restrictions are lifted as the user now owns the PC outright."

which no longer makes it seem that bad.. it's like leasing a car.
#1.1 Morphie on 22 May 2006 - 20:52
If it wasn't "lease to own" I'd be ****ed.
#1.2 theyarecomingforyou on 22 May 2006 - 22:24
I was thinking the exact same thing.
#1.3 The_Decryptor on 22 May 2006 - 23:31
What happens when you have to reinstall?

Do you have to re-enter all the keys, or do you get one master key to show you own it?
#1.4 ~*McoreD*~ on 22 May 2006 - 23:44
I was feeling the same way. After all if you own the PC, it's all good.
Very good question The_Decryptor. Hopefully they give you the Retail key once everything is paid.
#1.5 theyarecomingforyou on 23 May 2006 - 01:01
I'd imagine they'd give you a master key and several top-up keys, that way once it is completed the original key will act exactly like any other copy.
#2 nauge on 22 May 2006 - 20:55
Good idea microsoft, Though i think i would rather the full version myself...
Might help out others though.
#3 Erez.B on 22 May 2006 - 21:16
this is a great idea!!!! I like it very much! like a payment program in a bank
#4 WDGC on 22 May 2006 - 21:21
Seems like a good idea.
(1 reply) #5 simsie on 22 May 2006 - 21:23
due to the supposedly high vista prices this system may work in UK for students who can;t afford the desirable version of windows vista (after all, microsoft said themselves that ultimate is for students)
#5.1 Smigit on 22 May 2006 - 22:03
When did they say ultimate was for students? It seems more aimed at gamers and power users if you ask me. Also a student can still run a cheaper version if they want (not to mention the academic licensing scheme makes windows cheap as chips for students).

Windows isnt expensive at all for students. It cost me substantuially less than many of my text books for uni. about $110AU compared to several books that cost me $150AU or so.

Last edited by Smigit on 23 May 2006 - 02:13
(7 replies) #6 D-M on 22 May 2006 - 21:24
It seems like a *good idea* to very few, but it the long run people will buy or download pirated verisons more in the long run. If the operating system wasn't so overpriced, it might help reduce pirated copies of the OS. Besides, if you *tier* windows, your not gonna meet everyone's satisfaction needs. Anotherwords, everyone's needs are different in one way or another.

In all relativity it's not the smartest move by Microsoft. Nice try on the marketing scheme though. Don't blame piracy all the way, blame your marketing team for pricing it too high. Enough said.
#6.1 Erez.B on 22 May 2006 - 21:32
Quote - D-M said @ #3.1
It seems like a *good idea* to very few, but it the long run people will buy or download pirated verisons more in the long run. If the operating system wasn't so overpriced, it might help reduce pirated copies of the OS. Besides, if you *tier* windows, your not gonna meet everyone's satisfaction needs. Anotherwords, everyone's needs are different in one way or another.

In all relativity it's not the smartest move by Microsoft. Nice try on the marketing scheme though. Don't blame piracy all the way, blame your marketing team for pricing it too high. Enough said.


You are right... because I have a pirated edition of windows and thats because I don't wanna pay a software that is overpriced with a lot of bugs in it :
#6.2 Smigit on 22 May 2006 - 22:04
thats a pretty weak excuse to justify theft...
#6.3 Computer Guru on 22 May 2006 - 22:31
if it's over priced and buggy, do i really need to ask? oh well: why use it?
#6.4 zivan56 on 23 May 2006 - 01:49
Because they have a monopoly which requires you to use it for the sake of "compatability."
#6.5 markjensen on 23 May 2006 - 02:12
Most people aren't required to use it. I don't. Some people just like to complain. If you don't like it, stop using it and shut up!

(sorry, I guess I needed to vent)
#6.6 Smigit on 23 May 2006 - 02:29
"Because they have a monopoly which requires you to use it for the sake of "compatability."

Why? Between Open office and many other apps linux has many business needs covered and lets not forget Mac which can do close to as much as windows. The only people who cant use alternatives are those that require specialised programs for work (some cads and such) and since its a business machine theres a good chance the user doesnt own the system but the business does so there again is no reason for the copy to be pirated.

As for games, in what way are you "required" to play those. If you wana play games then yeah your sorta tied to Windows or alternatively buy a console. But yet again thats no real excuse to be stealing the OS. It really amuses me when people blame Microsoft as being the cause for them pirating software as if the user was forced into using the OS as their home OS. People wouldnt pay to use it even if it wasnt "buggy", I can guarantee you of that.

And yeah I use windows, I fail to see how it's as buggy as people make out. It has its limitations but limitations != bugs and its generally pretty stable and any issue is usually with something I installed not with Windows itself.
#6.7 nw_raptor on 25 May 2006 - 15:44
"Because they have a monopoly which requires you to use it for the sake of "compatability."

Agreed.

"If you don't like it, stop using it and shut up!"

This must be the first time I disagree with you. Tell me you're not turning to the Dark Side

I'm all for your "shup up" part, but you see, sometimes it is not up to us to choose. At uni/college, we are asked to do work at home, so we have to stick with <ProgramName> <VersionThis,NotThat>. There might be alternatives, but we cannot make use of them because, well, we need to be "compatible". I'm sure you're ready to burst saying "there's OpenOffice". Bad news. Just because we can get office application compatibility doesn't mean our problem is solved. In fact, we only use Office applications in order to open up our assignments and maybe write a report. Our work involves programming, databases, electronics simulation and statistics. That means we got to use other programs in the process.

I do like Linux. In fact most of the time that's what I use. But either I want to or not, I cannot get rid of Windows. I guess you get the point. So please,

In any case, I'm not saying piracy is okay. I'm just proving a point.
#7 Julius Caro on 22 May 2006 - 21:36
This things always end up beeing more expensive than paying it all at once anyway
#8 devilotX on 22 May 2006 - 21:44
unfortunatly something like this is just screaming to be cracked.... however this could be great for those of us wanting computers for Linux, get the PC at a reduced price, format the drive and install linux.
(1 reply) #9 Deron Dantzler on 22 May 2006 - 21:45
It's terrible. The OS isn't that expensive.
#9.1 adversedeviant on 22 May 2006 - 21:53
maybe not to people like you who can wipe thier *** with money but hey we're only talking about third world contries
(2 replies) #10 denzilla on 22 May 2006 - 21:48
IMHO if MS would simply drop the price of office and the OS down to $100 each more people would buy it. What they didn't make on the initial killing they would gain in more actually sold copies. They sell OEM copies of the OS for less $100 a pop all day, they sell both the OS and Office to students dirt cheap on campus. Why do they feel the need to screw people at the retail shelves constantly? Its going to hurt Vista's adoption if the price is as high as reported.
#10.1 mpat1024 on 22 May 2006 - 22:23
Agreed. They really should drop their prices. That attracts more people to their software. Right now Windows & Office are way too expensive for 3rd world PC users to afford.

Yeah, buying MS software on your university campus is VERY cheap. I will be able to get legit copies of windows & office professional + Onenote for under £120 when I go to university. This approach has to extended to third world countries.

On a side note, what's happening with those $100 laptops that are being made for people in the developing countries?
#10.2 theyarecomingforyou on 22 May 2006 - 22:32
£100-150 is a completely reasonable price for an OS... £170 for XP Home Retail and £225 for XP Pro Retail is just ridiculous and Vista will no doubt cost a lot more. I don't understand why OEM prices are reasonable (though £90 is still expensive in comparison to what the US pays) and yet retail prices rip you a new hole.
#11 denzilla on 22 May 2006 - 22:57
OEM copies are only good for the machine it was bought for whereas a retail copy can be transferred from one machine to the next as long as its only installed on one PC at a time (unless otherwise specified in the EULA). This doesn't excuse the high price of the retail copy, though.
#12 Winston on 22 May 2006 - 23:19
What happens when u format lol
#13 Enigma776 on 22 May 2006 - 23:27
there are 2 sorts of oem though the one that comes with machines from Dell,HP and so and the standard oem which actually licenses the case the sticker is on not the actuall hardware. it's true if you read the EULA
(5 replies) #14 Gary_Player on 22 May 2006 - 23:31
Gimme 4 cards, a screwdriver, and a chewing gum wrapper and I'll have a keygen for you
#14.1 PureLegend on 23 May 2006 - 06:38
I have yet to see a Windows keygen. Cracks, yes, but no keygens.
#14.2 Fubar on 23 May 2006 - 07:08
i have a few keygens for windows
#14.3 Unplugged on 23 May 2006 - 08:21
Probably the sort of keygen that has a database of about 50 and just picks a random one
#14.4 Fubar on 23 May 2006 - 08:31
actualy your wrong , the xp keygen actual scans the net for valid keys , dont ask me how but it does , you type in the amount of keys you want it to find and away it goes , please note i do own a legit copy of xp , i was just curious as to what the keygen did and how it worked
#14.5 XerXis on 23 May 2006 - 13:03
which means it doesn't generate them but takes them from databases, so not a keyGENerator i would think
#15 Audhumla on 22 May 2006 - 23:42
Well that's certainly a... creative detour from just, you know, lowering the price.
#16 Shadrack on 22 May 2006 - 23:43
I don't see how this is going to help with piracy in 3rd world countries tbh.

People are use to getting Windows for free. Pirating software from some big rich US run corporation is the social norm.
#17 Cierro on 22 May 2006 - 23:51
LOL
#18 Leo Natan on 23 May 2006 - 00:15
What would happen if you buy the cheap PC, and then install a pirated version? It's a win-win situation for the consumer, LOL
#19 Kushan on 23 May 2006 - 00:22
It's a novel idea that you can be sure is going to get abused to hell.
#20 planetik on 23 May 2006 - 03:11
I say kudos to Microsoft
(1 reply) #21 Izlude on 23 May 2006 - 03:52
indeed, what HAPPENS, when you format? as asked above... Well it's been a long time since I formatted, but stuff happens... I think I'll stick to me' vurtual hardys! yo ho! talk like a pirate, and laugh like one too!
#21.1 PureLegend on 23 May 2006 - 06:40
I assume it'll do what preloaded MCE does; reinstall from a partition.

And I think the sort of user this is aimed at doesn't know what a format means.
(1 reply) #22 ziggie216 on 23 May 2006 - 05:08
yea it may be a nice idea.. but then you should be asking.. whats the finals price that ms is charging? would this cost the same as if you were buying it like a typical software product, or would some how the cost would be higher?
#22.1 axious on 23 May 2006 - 05:31
It's obvious the overall cost would be higher. It's exactly like purchasing on HP. Instead of being e.g. £100 it will end up being e.g. £150. The extra £50 being the "credit charge" etc.
#23 Raa on 23 May 2006 - 06:09
Just reformat the pc, and use it yourself

hehe
#24 PureLegend on 23 May 2006 - 06:39
This is a good idea!
(3 replies) #25 SweetLou on 23 May 2006 - 07:48
So, Windows and Office are overpriced? Could someone tell me what is the correct price? Oh, and please explain how you arrived at that price.
Do you people that think the OS is overpriced understand economics? Someone aboved mentioned that Microsoft should lower the price because they would sell more. Do you think Microsoft just came up with a price and went with it? It's called supply and demand, that is what determines the price of anything, not the company. It is the interaction between the company and the users that determine the price.
You are not required to use Windows. I can do anything in Linux that you can do in Windows, and yes, that means play games also.
#25.1 D-M on 23 May 2006 - 09:54
I can do anything in Linux that you can do in Windows, and yes, that means play games also. Quoted by SweetLou

Sure you could play all the games when you emulate Windows beneath your Linux Box. Your too funny.

It's called supply and demand, that is what determines the price of anything, not the company. Quoted by SweetLou

Since when did Windows become supply and demand? LOL.

Last edited by D-M on 23 May 2006 - 11:32
#25.2 Fubar on 23 May 2006 - 11:09
im sorry but you cant play all games on linux that you can play on windows , i tried playing call of duty 2 under linux and it just would not launch , it would install fine but not launch , yet with Ut 2004 it plays ok because it uses opengl as well as directx , until linux becomes 100% game playable i will continue to use windows xp for games , everything else is used on linux
#25.3 SweetLou on 23 May 2006 - 18:48
Yes, Microsoft uses supply and demand to set the price. This is determined by the company and you and me. Microsoft wants to make the most profit, supply and demand determines this.

I don't emulate Windows in Linux to use Windows apps and games, though I don't use many Windows' apps.

Never tried call of duty, so I will agree with you that all games won't play on Linux, but enough do that it won't justify piracy because you need it. There are many other games out there that you can play.
The concept of stealing because you can't afford something is wrong. I can't afford a Mac, but they have some cool apps. That doesn't mean I should go out and steal a Mac. I will just have to use an alternative app or game. What I am saying is that you have alternatives, you don't "need" Windows.
#26 m-head on 23 May 2006 - 08:00
This is just another thing that will be cracked, although they will make a bit more than outright pirating does. They'll profit from the initial fee from the people who went that route.
#27 HeLGeN-X on 23 May 2006 - 08:11
Dumbest idea ever. Plus, that **** would get hacked/cracked in no time, so they should just work on a better OS than making something rediculous like this.
(2 replies) #28 Ad_Enuff on 23 May 2006 - 08:57
God forbid Microsoft actually reduces their OS's to a more affordable price so everyone on the street would buy an official legit copy!

If you think how many Pirate copies are out there and if the cost was say £50 / U$50, then how much revenue would be generated by these figures?

It’s the old age problem of companies selling products at high prices because of piracy yet if they reduced their prices more people would be prepared to purchase a full version.
#28.1 HawkMan on 23 May 2006 - 11:42
Imagioen a graph created by proffesional market analysts, like those hired by MS.

With one graph showing expected number of units sold at reduced costs and what income this would give.

the other showign the same, but with current prices.


Where these graphs itnersect, that's where MS starts too loose more money because even if they sell more units at a reduced price, they don't sell enoughto make up for the reduced price, compared to what they.

this intersection is where the price is set it, it's as it is maximum profit.


so reduced price, does nto automtically mean increased income. especially not in coutrnies like these where peopel still wouldn't have enough money to afford it at a price that makes it commercially viable to sell it.

Hence this system comes in, just like you sell mobile phones with subidaries, you can buy windows for a small start price, and pay it down as you use it, instead of all at once.


This means more people can buy windows, and MS still makes money off the sold copies. and everyone's happy. Except the MS haters.
#28.2 SweetLou on 23 May 2006 - 18:41
Thanks, I thought I was the only one who understood supply and demand.
#29 Guol on 23 May 2006 - 11:19
Seems like a good idea..

Except what happens once a person reformats their PC?
#30 Zelath on 23 May 2006 - 11:25
That sounds like one of the worst ideas I have ever heard of.
(1 reply) #31 lmortiss on 23 May 2006 - 12:27
Hello Fubar
I am very new to this website and I am intrigued re the XP Keygen utility you mention in your article ref. 14.4 can you direct me to where i can get this software as i have bought a very good powerful PC with XP Pro already on it but as usual it as an illegal copy of the software on th PC I only came to realise when I put in Auto update and it ingromed me.Can you hel pme pleae.

to keep it incognito and not confuse other members on this excellent website please email the info to

" lmortiss@hotmail.com "

I await your revelations with gusto my friend :-)

cheers

lmortiss
#31.1 XerXis on 23 May 2006 - 13:04
the only thing you should do is buy windows xp
#32 D-M on 23 May 2006 - 12:54
Reply to #31 -

It probably will not be long before your post is deleted.. People nowadays do not seem to take the time to read anything. *HINT* - Start with the rules & regulations of this website.

to keep it incognito and not confuse other members on this excellent website please email the info to Quoted by Imortiss

Your really incognito at the moment. LOL
#33 Lanky on 23 May 2006 - 14:00
This is a very good idea for people that cannot afford a computer and don't want to have to wait and save.
They will probably make you sign a contract and they will check in on you to check your not abusing it.
(2 replies) #34 dick471 on 23 May 2006 - 15:33
This will never work!! Can you imagine the Class Action lawsuits for crashes, lockups, spyware with any windows operating system. This would only work if Chrysler/Ford/or GM wrote the operating system. Linux might work?
#34.1 Cierro on 23 May 2006 - 18:45
oh yea because cars never have problems either right? and spyware... well sorry microsoft cant hold your hand and stop you from installing bonzibuddy or w.e

and u just have to be joking, on crack, or an idiot.
#34.2 dick471 on 24 May 2006 - 01:46
Cierro: Do you eat with that same bad mouth? I'm just a retired Avionics Engineer and NOT joking. Why to most hackers attack Windows? (It's easy)
#35 predator001 on 23 May 2006 - 23:41
still more expensive than piracy...which in many instances costs 0.
(1 reply) #36 Fantmx on 24 May 2006 - 18:07
People pirate software that costs $20.00 or less. Why would anyone think Microsoft lowering their price on Windows and office cause more people to buy those products? Anyone claiming that is simply using it as an excuse to bash Microsoft and justify their own theft.
#36.1 Ad_Enuff on 25 May 2006 - 14:39
I'm talking specifically Operating Systems only. With Microsofts idea of "pay as you go" licensing what does that say about their price structure?

It says most people agree that its too expensive and with a PC requiring some sort of operating system Microsoft has its consumers by the short and curlies.

Most would agree that an Operating System should be somethign that all of us could purchase and it benefits Microsoft by its userbase upgrading to allow NEW software including their own on older PC's.

An OEM version of Windows XP Pro is about £100 here in the UK and a RETAIL version being almost 3 times that! Quite frankly anyone wishing to upgrade their PC's to XP Pro or Home shoudl feel a little upset by the price and abandoned by Microsoft by moving to the next OS platform. Why should anyone pay the huge prices for something a PC user critically needs?

Thats where piracy enters the equation. With piracy here in the UK being 25% of all programs installed on UK PC's and worth over £1 Billion pounds why wouldnt Microsoft see this as a nice chunk of change if they reduced there prices on OS's?

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