Now, take Windows, Office on rent

To curtail rampant piracy in emerging markets, Microsoft has started a rental scheme for the Windows and Office 2007 software in India, China, South America and Africa.

Over 80% of PCs in the world run on the Windows operating system and use the Microsoft Office suite of applications.

The scheme is computer-specific. “A rental rights licence is permanently assigned to a specific device (computer) and may not be reassigned to another device. When the device reaches its operational end-of-life, so does the licence,” said Microsoft.

So once you have loaded the software on to a computer, you can’t uninstall and load it on another without paying the rental fee once again to Microsoft. This is different from buying software from Microsoft; once you register the software in your name, you can’t resell it. But with the rental scheme, you can on-sell it to someone else, who will have to pay fresh rental fees on the same software to you, which you give to Microsoft.

Potentially, Microsoft can earn infinitely from each set of rented software as a chain gets built. The announcement has been in effect from January 1, 2010.

Organisations, including internet cafes, can rent, lease, or outsource computers running on Windows and having Office 2007 by paying a rental fee just once, instead of having to pay monthly subscription under an earlier licensing policy by Microsoft.

In May last year, Ravi Venkatesan, head of Microsoft India, had said that a study by the company found that businesses can lose up to Rs1.5 lakh a month due to pirated software.

Businesses using pirated Windows XP face system failure four times a year, with each failure causing two hours of downtime. The opportunity cost of each system failure is about Rs65,000 per computer per month.