[Kictanet] Microsoft tries pay-as-you-go approach for Windows PCs

Dorcas Muthoni dmuthoni at kenet.or.ke
Wed May 24 09:56:25 EAT 2006

'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.

Microsoft has conducted a trial of the model in Brazil
over the past year. FlexGo PCs were sold through the
popular Brazilian retailer Magazine Luiza; all users
needed to get one was a small down payment. The
program proved to be very popular with Brazilian
consumers, and Magazine Luiza reported that sales more
than doubled. Of those who bought PCs using
Microsoft's pay-as-you-go model, 31 percent said that
they would not have purchased them had the FlexGo
option not been possible.

Because of the initiative's success in Brazil, FlexGo
will be rolled out in Mexico, India, China, and Russia
in upcoming months.'


'Technically, FlexGo requires a PC that can measure
its operating hours and contains mechanisms to block
further operation after the time paid for has been
used up. In this blocked operating mode, customers
will only be able to purchase additional time from the
provider. Microsoft is also providing software tools
to measure and manage the operating hours.'



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