Microsoft's new pay-as-you-go licensing product has entered the South African market, but has struggled to filter through to consumers due to what Microsoft calls "a delay [in] the OEM distribution [channel]".
The product is now finally on the shelves, but resellers say it remains to be seen whether anyone will buy it.
The pay-as-you-go model is one where customers buying a new PC can choose to pay-as-they-go for Microsoft Office, instead of buying a full Office complement for about R6 000. Customers choosing the prepaid option buy a "starter pack" with three months' free product access and three months' paid-for access, after which they have to "top up" every four months in order to keep using the software.
According to Microsoft, the product is aimed at "emerging customers", such as those starting up new businesses, "who do not yet have the capital available to purchase Microsoft Office perpetual licences".
Matrix Computers Warehouse MD Jan Boshoff says while the pay-as you-go product the company piloted for Microsoft earlier this year sold extremely well, the 2007 Office product now being offered is not priced attractively enough for Matrix to sell it.
Pricing altered
"For R200 you get three months' free use of the product, after which you have three months' subscription," explains Boshoff. "As an OEM seller, we can offer the buyer two months' free use already, so essentially they are paying R200 for one extra 'free' month, which doesn't make business sense." Top-ups on the 2007 Office prepaid structure cost about R100.
The 2003 Office package, sold during the trial of the pay-as-you-go system, was priced at R100 for two months' trial, with top-ups costing about R49 for every additional two-month usage. Microsoft could not supply sales figured for its 2007 Office pay-as-you-go product offering at the time of publication.
According to Microsoft, the pricing in the full version of the prepaid system is different from that used during the trial as the exchange rate has worsened, negatively impacting prices.
Boshoff says while he is not selling many of the 2007 prepaid kits, at least two of the company's distributors are able to provide Matrix with product stock at the moment. Smaller retailers have, however, not been as lucky.
Market awareness
Computer reseller Digital Inspiration sales manager Mark Griffiths says his buyers have not been able to get hold of the new Microsoft product at all.
Chaos Computing was one of the companies involved in piloting the prepaid system. MD Riaan Swart was not available for an interview at the time of publication, but did indicate the company has also had problems obtaining the Microsoft product, and that the problem lay with the software giant.
According to Microsoft: "Office PrePaid is available at four OEM distributors, namely Mustek, Sahara Computers, Axis, and Rectron. It has been available for order since mid-July and is moving into the market. As with all new offerings, it will take time for full market awareness and adoption."
Computing retailer Incredible Connection software buyer Garth Davies says it is not carrying the new Microsoft product at all. "We were not consulted and the trial versions were run at Matrix and others." Davies says the company is, however, in talks with Microsoft to address the impasse.
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