Microsoft outlines pay-per-use PC vision

[gkarris]

UNBELIEVABLE...

http://news.cnet.com/8301-1001_3-10129438-92.html

December 29, 2008 6:00 AM PST
Microsoft outlines pay-per-use PC vision
Posted by David Meyer

Microsoft has applied for a patent on metered, pay-as-you-go computing.

U.S. patent application number 20080319910, published on Christmas Day, details Microsoft's vision of a situation where a "standard model" of PC is given away or heavily subsidized by someone in the supply chain. The end user then pays to use the computer, with charges based on both the length of usage time and the performance levels utilized, along with a "one-time charge."

Microsoft notes in the application that the end user could end up paying more for the computer, compared with the one-off cost entailed in the existing PC business model, but argues the user would benefit by having a PC with an extended "useful life."

"A computer with scalable performance level components and selectable software and service options has a user interface that allows individual performance levels to be selected," reads the patent application's abstract. The patent application was filed June 21, 2007.

"The scalable performance level components may include a processor, memory, graphics controller, etc. Software and services may include word processing, email, browsing, database access, etc. To support a pay-per-use business model, each selectable item may have a cost associated with it, allowing a user to pay for the services actually selected and that presumably correspond to the task or tasks being performed," the abstract continues.

Integral to Microsoft's vision is a security module, embedded in the PC, that would effectively lock the PC to a certain supplier.

"The metering agents and specific elements of the security module...allow an underwriter in the supply chain to confidently supply a computer at little or no upfront cost to a user or business, aware that their investment is protected and that the scalable performance capabilities generate revenue commensurate with actual performance level settings and usage," the application reads.

'A more granular approach'
According to the application, the issue with the existing PC business model is that it "requires more or less a one chance at the consumer kind of mentality, where elasticity curves are based on the pressure to maximize profits on a one-time-sale, one-shot-at-the-consumer mentality."

Microsoft's proposed model, on the other hand, could "allow a more granular approach to hardware and software sales," the application states, adding that the user "may be able to select a level of performance related to processor, memory, graphics power, etc that is driven not by a lifetime maximum requirement but rather by the need of the moment."

"When the need is browsing, a low level of performance may be used and, when network-based interactive gaming is the need of the moment, the highest available performance may be made available to the user," the document reads. "Because the user only pays for the performance level of the moment, the user may see no reason to not acquire a device with a high degree of functionality, in terms of both hardware and software, and experiment with a usage level that suits different performance requirements."

By way of example, the application posits a situation involving three "bundles" of applications and performance: office, gaming, and browsing.

"The office bundle may include word-processing and spreadsheet applications, medium graphics performance and two of three processor cores," the document reads. "The gaming bundle may include no productivity applications but may include 3D graphics support and three of three processor cores. The browsing bundle may include no productivity applications, medium graphics performance and high-speed network interface."

"Charging for the various bundles may be by bundle and by duration. For example, the office bundle may be $1.00 [68 pence] per hour, the gaming bundle may be $1.25 per hour and the browsing bundle may be $0.80 per hour. The usage charges may be abstracted to 'units/hour' to make currency conversions simpler. Alternatively, a bundle may incur a one-time charge that is operable until changed or for a fixed-usage period," the document reads.

Microsoft's patent application does acknowledge that a per-use model of computing would probably increase the cost of ownership over the PC's lifetime. The company argues in its application, however, that "the payments can be deferred and the user can extend the useful life of the computer beyond that of the one-time purchase machine."

The document suggests that "both users and suppliers benefit from this new business model" because "the user is able to migrate the performance level of the computer as needs change over time, while the supplier can develop a revenue stream business that may actually have higher value than the one-time purchase model currently practiced."

"Rather than suffering through less-than-adequate performance for a significant portion of the life of a computer, a user can increase performance level over time, at a slight premium of payments," the application reads. "When the performance level finally reaches its maximum and still better performance is required, then the user may upgrade to a new computer, running at a relatively low performance level, probably with little or no change in the cost of use."

 

[waloshin]

UNBELIEVABLE...

http://news.cnet.com/8301-1001_3-10129438-92.html

I have heard about that years ago, no not unbelievable its just another way to make more money!

 

[mkrishnan]

I have heard about that years ago, no not unbelievable its just another way to make more money!

The idea of metering computer usage and providing the computer free is old ... the idea of providing a high-performance computer and then metering its performance is pretty new, AFAIK, although not particularly brilliant. In the extremely long term scheme of things, more and more of the content moves to the internet and the computer becomes more and more of a terminal for the internet, and eventually that process could so transform the market that PCs become, like phones in the US, a subsidized component of the overall selling strategy of the provider.

Certainly, MS has an onus to put itself and its supply chain back on a path where users actually perceive the need to upgrade, and away from the path where so many people are ignoring Vista and the expectation now is that Windows 7 will perform quite well on even hardware that is several years out of date by the time it comes out.

But the market conditions don't nearly line up right now for that.

 

[ButtUglyJeff]

I thought a PeoplePC died years ago. Way to go M$......

 

[Luftwaffles]

This is why Microsoft is doomed to failure. They're employing 90,000 people to work on thousands of products.

Apple, on the other hand, employs 30,000 people to work on 50 products, tops.

Microsoft is trying to be everything and do everything... they're trying to spread their resources across an immensely vast field of products, much akin to Yahoo, and we all know how that ended. Peanut butter sandwich, anyone?

 

[ChrisA]

UNBELIEVABLE...

No. It sounds like a cell phone to me. Get them away then charge for each minute of use. Apple is not far from this with their iPhone. They offer a $200 phone with a $2000 contract attached.

What's happening is that the price of hardware is falling through the floor. You can buy a PC for $300 today. How long before the price hits $150 or $75 or free. When you think about it $300 is only a few hundred dollars away from free.

Software is already free. Linux, BSD and Solaris are all free. Same for most of the software that runs on those OSes too.

So whne the stuff you sell is on schedule to be free what do you do?

The idea of metering computer usage and providing the computer free is old ... the idea of providing a high-performance computer and then metering its performance is pretty new,

No, I can think of two examples fromthe early 80's and 70's where computers were placed on-site by the suppliers and you paid a monthy fee. For a higher fee the supplier would come out and double the machine's clock rate of add more memory or disk space. You paid for a level of performance and the supliier made sure you had a working computer that provided the paid for level of performance. Periodically thay might replace the computers or not. Many of these companies are gone, CA, Wang, Data General but there were more then one. It was a common way to "sell" computers.

Actually it was atractive to the company. We'd pay a fixed cost that was predictable and all inclusive, it covered maintainance and technical support. Typically in those days you would know your tech support guy by first name, same for the sales guy and the hardware engineer

 

[PlaceofDis]

it is an interesting idea. but not one i see coming to fruition anytime soon. just because its being patented doesnt mean it will ever be done.

 

[gkarris]

No. It sounds like a cell phone to me. Get them away then charge for each minute of use. Apple is not far from this with their iPhone. They offer a $200 phone with a $2000 contract attached.

What's happening is that the price of hardware is falling through the floor. You can buy a PC for $300 today. How long before the price hits $150 or $75 or free. When you think about it $300 is only a few hundred dollars away from free.

Software is already free. Linux, BSD and Solaris are all free. Same for most of the software that runs on those OSes too.

So whne the stuff you sell is on schedule to be free what do you do?

No, I can think of two examples fromthe early 80's and 70's where computers were placed on-site by the suppliers and you paid a monthy fee. For a higher fee the supplier would come out and double the machine's clock rate of add more memory or disk space. You paid for a level of performance and the supliier made sure you had a working computer that provided the paid for level of performance. Periodically thay might replace the computers or not. Many of these companies are gone, CA, Wang, Data General but there were more then one. It was a common way to "sell" computers.

Actually it was atractive to the company. We'd pay a fixed cost that was predictable and all inclusive, it covered maintainance and technical support. Typically in those days you would know your tech support guy by first name, same for the sales guy and the hardware engineer

So, where's the line between saving user costs and DRM/Control?

 

[talkingfuture]

Its an interesting possibility. It will be hard to market this to the general public, look at the negative reactions to it so far. I think they will need to come up with some sort of interesting hook to get people to buy into it.

 

[Demosthenes X]

What's happening is that the price of hardware is falling through the floor. You can buy a PC for $300 today. How long before the price hits $150 or $75 or free. When you think about it $300 is only a few hundred dollars away from free.

Some ISPs already offer free computers to anyone signing up for their internet service. I can see this sort of subsidization model taking off in the future. With services like Google Docs, we're already at a point where one could do almost all their computing online, with no need for a local machine - just a terminal with internet connectivity.

I think the idea of "renting" a machine and paying on a per-usage basis is silly for consumers, though. :/

 

[gkarris]

You know, all these local apps turning into "web apps" only makes it one step closer to Microsoft's thing...