Monopoly Money nytimes.com
Check the mail -- your monthly Microsoft bill could be on the way
That's old pal James Gleick, catching up on the news. And it's not exactly new news either, Bill's desire to move away from fixed prices and generate the old "continuing revenue stream" has been noted many times. I think the only thing that works that way now is MSN, of course, and that's enteretainment too. Then there was Nathan Myhrvold and the old Microsoft transaction fee, but where is Nathan now? Anyway, here's the tail end of the article, notable mainly for the somewhat ambiguous punch line at the end.
This is the genius of the Microsoft bill: instead of one-time payments, the new model depends on a monthly charge joining the rest of our utility payments -- tethering us to the company and creating a revenue stream as steady as Niagara. The founder and former C.E.O. of Autodesk, John Walker, saw this coming years ago -- a transformation in the relationship between software vendors and their customers," he wrote in a 1993 paper, "fully as significant as the emergence of computer retailing." He predicted that companies making the leap -- meaning Microsoft and, he hoped, Autodesk -- could "find themselves in as unassailable a market position as any company in this century: the 'natural monopolies' of the next."
He even talked it over with the other Microsoft Bill, and published an "enlightening" excerpt of their March 20, 1992, conversation:
WALKER: So let me see if I understand where you're going with this, Bill. What you'd really like is if in, say, five years, everybody with a computer gets a Microsoft bill every month, just like a telephone bill, for each product they use.
GATES: Precisely.
Gates himself is not available for comment at the moment; Microsoft's spokesman, Greg Shaw, says he doesn't think the dialogue "adequately captures today's thinking." Times have changed. "In the interim, the Internet has come along," he notes dryly.
He has a point. Huge categories of information and software that people used to buy -- dictionaries, maps, manuals, date books, calculators and games of all kinds -- now flow across the wires to anyone with a Web browser. And the price is usually zero.
But it's safe to say that isn't what Microsoft has in mind for Office, competition for which has systematically fallen by the wayside. Nearly half of the company's revenues now come from selling core programs. Whether Microsoft can convert these revenues to an ongoing monthly stipend, while converting us into permanent subscribers, may be a question outside Judge Jackson's realm.
Walker, now living in Switzerland, agrees that he failed to predict at least one feature of the future into which we are now plunging. "At the time, I lacked the imagination to envision the next step," he says, "transitioning the Microsoft bill into a Microsoft tax."
Cheers, Dan. |
