Microsoft outlines pay-per-use PC vision

Microsoft has applied for a patent on metered, pay-as-you-go computing.
U.S. patent application number 20080319910, published on Christmas Day, 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."


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 patent application was filed June 21, 2007.
"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.
'A more granular approach'
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."
"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."
By way of example, the application posits a situation involving three "bundles" of applications and performance: office, gaming, and browsing.
"The office bundle may include word-processing and spreadsheet applications, medium graphics performance and two of three processor cores," the document reads. "The gaming bundle may include no productivity applications but may include 3D graphics support and three of three processor cores. The browsing bundle may include no productivity applications, medium graphics performance and high-speed network interface."
"Charging for the various bundles may be by bundle and by duration. For example, the office bundle may be $1.00 [68 pence] per hour, the gaming bundle may be $1.25 per hour and the browsing bundle may be $0.80 per hour. The usage charges may be abstracted to 'units/hour' to make currency conversions simpler. Alternatively, a bundle may incur a one-time charge that is operable until changed or for a fixed-usage period," the document reads.
Microsoft's patent application does acknowledge that a per-use model of computing would probably increase the cost of ownership over the PC's lifetime. The company argues in its application, however, that "the payments can be deferred and the user can extend the useful life of the computer beyond that of the one-time purchase machine."
The document suggests that "both users and suppliers benefit from this new business model" because "the user is able to migrate the performance level of the computer as needs change over time, while the supplier can develop a revenue stream business that may actually have higher value than the one-time purchase model currently practiced."
"Rather than suffering through less-than-adequate performance for a significant portion of the life of a computer, a user can increase performance level over time, at a slight premium of payments," the application reads. "When the performance level finally reaches its maximum and still better performance is required, then the user may upgrade to a new computer, running at a relatively low performance level, probably with little or no change in the cost of use."



Microsoft outlines pay-per-use PC vision | Business Tech - CNET News

Hi DA,

Interesting read

I can see where this business model would appeal to some SME companies, and some home users. The bottom line with this sort of thing is costings, if the cost of ownership is lower that the traditional model then It will take off if not then it will not, it's similar to the model used by small companies with photocopiers, telephone systems etc.

the fact that the Policing of applications used is taken from the user is also something that will appeal to the small business as it makes it easier to ensure that employees are using the technology for business, (and not playing Crysis on the new graphics workstation ).

The fact that the patent was filed when it was is a little worrying though

I have a suspician that this is not so much a new business model but an anti-piracy and anti open source device.

Whilst I have no time for software piracy but do believe in and use open source.

For the likes of me where I may have to run anything at anytime ( troubleshooting for clients ). I think there is still a strong need for the traditional sales models ( the 30 day trial will be long enough for my purpose )

leasing computers.

Uh. no. I'll pass.

In the end you most likely will end up paying for more than a standard computer, but you won't own one.... -baMBi-

Lost me at pay-per....

Actually it is a great marketing ploy - they can point to the Vista capable fiasco and say "Lease from us and you'll be able to use hardware that has been tested and is known to work with our OS and the applications that you select. Moreover, it will allow M$ to dictate what hardware the user will need, taking the guesswork out of n00bs trying to build new machines and missing key / critical elements that cause their systems to go belly-up.

Personally, though, I hate marketing schemes....