Where the Real Monopoly Is

Microsoft takes a big risk with Office XP's forced registration

Microsoft Office XP aptly demonstrates what we knew all along: The Department of Justice (DOJ) was wrong in prosecuting Microsoft over its browser; the company's real monopoly is in Office. Office XP embraces two of the most user-unfriendly concepts the industry has seen since Lotus attempted to add copy protection to Lotus 1-2-3: a subscription-based licensing option and forced registration.

I understand that software piracy and the need to increase unit sales are driving Microsoft to implement some changes. However, putting the aims of the company's shareholders ahead of the desires of the customers seems rather shortsighted. Microsoft has strayed a long way from its roots as the producer of user-friendly software.

Subscription Model
In spite of Microsoft's claims to the contrary, neither subscriptions nor forced registration is very friendly to users. At first, a software subscription might seem like a good deal—you pay less to lease the software for a short period. However, in the long run, a subscription binds you to the vendor, forcing you to make future payments for software upgrades so that you can keep using the software. If you stop paying for upgrades, Microsoft restricts the use of your previously registered copy.

Registration Requirement
Forced registration, which is required to implement an Office XP software subscription, is equally unfriendly. The process generates a key that locks Office XP to a particular system configuration, which raises two concerns. First is the question of Microsoft's trustworthiness. Microsoft's earlier exploits in the area of online registration certainly don't inspire confidence in the company's concern for its customers' privacy. The Windows 98 and Office 97 registration process covertly extracted private system information that others could access without the user's knowledge or permission.

Second is the question of what level of vendor interference in your business is acceptable. Upgrade a hard drive on a system with an Office XP subscription license, and you need to contact Microsoft to reregister. Change out your NIC, and you need to reregister. Change your motherboard and processor, and reregister. Upgrade to a new computer, and reregister. Essentially, Microsoft is making you ask permission to keep using software you've already paid for each time you make a system change that's really none of the company's business.

Unfriendliness Factor
In a year, you easily might need to perform all the upgrades I've mentioned. Who wants the hassle of reregistering the Office software on each such occasion? What a fiasco an upgrade would be if this type of forced registration became prevalent in the industry. Reregistering one software product four times a year is unacceptable; reregistering all your software could easily take longer than performing the upgrade.

Fortunately, I don't expect to see mass forced registration anytime soon. Why? Because other software markets have healthy competition. Only in the Office area does Microsoft have such dominance that the company can risk this controlling behavior. Office XP's biggest competition comes from earlier Office releases, and Microsoft shouldn't underestimate that competition. Most users don't tap the full feature set of earlier releases, so whether Office XP's new features will be enough to entice customers to upgrade isn't clear.

Office eX Post Facto
What is clear is that Microsoft has provided a couple of good reasons not to upgrade. Although Microsoft claims that XP stands for eXPerience, from the customer perspective, the acronym seems more likely to stand for eXtra Profits and perhaps eXPendable. Ironically, exactly this type of behavior from Lotus let Microsoft Excel overtake Lotus 1-2-3 in the spreadsheet market. Forced registration might prove to be just the opening Sun Microsystems' inferior (but free) StarOffice needs to gain a foothold in the industry.