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Microsoft’s Pay-as-you-go Computing

January 1, 2009

A ZDNet report sent to Zalud’s Blog reports that US patent application number 20080319910, published on Christmas Day 2008, details Microsoft's vision of a situation where a "standard model" of PC is given away or heavily subsidized by someone in the supply chain. The end user then pays to use the computer, with charges based on both the length of usage time and the performance levels utilized, along with a "one-time charge".

According to ZDNet, Microsoft notes in the application that the end user could end up paying more for the computer, compared with the one-off cost entailed in the existing PC business model, but argues the user would benefit by having a PC with an extended "useful life/”

"A computer with scalable performance level components and selectable software and service options has a user interface that allows individual performance levels to be selected," reads the patent application's abstract.

"The scalable performance level components may include a processor, memory, graphics controller, etc. Software and services may include word processing, email, browsing, database access, etc. To support a pay-per-use business model, each selectable item may have a cost associated with it, allowing a user to pay for the services actually selected and that presumably correspond to the task or tasks being performed," the abstract continues.

Integral to Microsoft's vision is a security module, embedded in the PC that would effectively lock the PC to a certain supplier.

"The metering agents and specific elements of the security module… allow an underwriter in the supply chain to confidently supply a computer at little or no upfront cost to a user or business, aware that their investment is protected and that the scalable performance capabilities generate revenue commensurate with actual performance level settings and usage," the application reads.

According to the application, the issue with the existing PC business model is that it "requires more or less a one chance at the consumer kind of mentality, where elasticity curves are based on the pressure to maximize profits on a one-time-sale, one-shot-at-the-consumer mentality".

Microsoft's proposed model, on the other hand, could "allow a more granular approach to hardware and software sales", the application states, adding that the user "may be able to select a level of performance related to processor, memory, graphics power, etc that is driven not by a lifetime maximum requirement but rather by the need of the moment".

Quoting the ZDNet report, "When the need is browsing, a low level of performance may be used and, when network-based interactive gaming is the need of the moment, the highest available performance may be made available to the user," the document reads. "Because the user only pays for the performance level of the moment, the user may see no reason to not acquire a device with a high degree of functionality, in terms of both hardware and software, and experiment with a usage level that suits different performance requirements."

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