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November 15, 1999

Why Own When You Can Rent?

By Aaron Ricadela and Jennifer Mateyaschuk

icrosoft took another cautious step toward tuning its products for Internet distribution last week by introducing a hosted version of Office 2000 called Office Online. The service, available now through application service providers and next year from Microsoft directly, is a distributed version of Office 2000 running on Windows Terminal Server and accessed via a browser.

Office Online involves a new Microsoft licensing model: ASPs pay Microsoft a monthly fee, instead of purchasing own-for-life agreements. ASPs will charge their customers $50 to $500 depending on how they package Office with hardware, connectivity, and other Microsoft apps. Microsoft wouldn't disclose its Office Online pricing plans, but says the outsourcing option will be attractive to small companies that lack sufficient IT staff to watch over their computing environments.

Renting productivity applications to companies that want to pay a monthly fee for usage, management, and storage is gaining favor. Sterling Investment Services Inc., an investment-management firm in Baltimore, is renting Office 2000, Exchange, and Great Plains financial apps from TeleComputing Inc. CIO Stephen Fragapane says the contract will ease communications with the firm's Sterling Learning Systems business in Boston and Atlanta.

"When I looked at my ISDN costs and services contracts to set up and support desktops, they were equal to what I get with TeleComputing," says Fragapane, "only I don't have to manage or maintain it."

return to the main story, "The New Forces Of Change."

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