Here comes the subscription model

One of the biggest fears voiced by those objecting loudly to Microsoft's new licensing scheme for Windows, and echoed by the people speaking out against Windows Product Activation, is that both are harbingers of a new model for software distribution - a subscription model. (see " Microsoft licensing - a moving target " , www.nwfusion.com/newsletters/nt/2001/01047641.html), and " Are pirates at the door? " , www.nwfusion.com/newsletters/nt/2001/01005812.html)

Microsoft did little to dispel that worry at last week's Professional Developers Conference when it revealed the details of licensing for what formerly was called " Hailstorm " and is now called " .Net My Services. " And isn't that name - .Net My Services - just too precious for words? Maybe next year, just in time for Christmas, Fisher-Price could roll out " .Net My First Services " for the kids. But I digress.

Microsoft says it will charge both consumers and developers to use the new services. Consumers will definitely pay on a subscription model, while developers will pay flat rates that escalate depending on the size of the development company (no details on how that is measured) in addition to a yearly fee (which sure sounds like another subscription scheme). In turn, third-party developers would have to pass on these fees to consumers - again, most likely as a subscription fee.

There are examples of the enterprise reaction to the subscription model and evidence that maybe a better approach is needed. Application Service Providers (ASPs) were the " hot new item " on the Internet hit parade. As frequently happens with " hot new items, " though (think ATM to the desktop as one example) events catch up with the hype and before the technology can be widely deployed the next " hot new item " has come along.

ASPs are still around, although they're barely hanging on and few are operating in the consumer or general business markets. That fact, however, doesn't invalidate the subscription model. The ASPs generally modeled their business plan on that of Internet Service Providers who went from metered service ($x/minute for connection) to so-called flat-rate service ($x/month for unlimited connection). That may have been the wrong model to pursue, however. There's another model, one from a company Microsoft would do well to admire and imitate because it was the way to do business for this technology for many, many years. More about that next time.

Dave Kearns is a writer and consultant in Silicon Valley. His most recent book is "Peter Norton's Complete Guide to Networks" published by SAMS. Dave's company, Virtual Quill, provides content services to network vendors: books, manuals, white papers, lectures and seminars, marketing, technical marketing and support documents. Virtual Quill provides "words to sell by..." Find out more at Virtual Quill or by e-mail at info@vquill.com

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