Microsoft pushes pay-as-you-go program in emerging markets

Stan Beer
Monday, 22 May 2006 17:18

Your IT - Home IT

Microsoft and chipmaker AMD have announced an agreement to jointly support a pay as you go business model for PC usage in emerging markets similar to prepaid mobile phone plans. The agreement, which uses a business model called FlexGo, follows similar partnerships between Microsoft and Intel, Infineon, Lenovo, Phoenix and Transmeta.

Unveiled today, the pay-as-you-go computing model enabled by Microsoft's FlexGo technology allows customers to have a fully featured PC at home by paying only for the time as they use it through the purchase of prepaid activation cards or tokens. The business enables users to buy PCs for about half the price they would normally pay but the installed software would have to be renewed regularly, based on how much time is used.

Microsoft has been running trials of the program in Brazil for more than a year and will soon be expanding to select markets in India, Russia, China and Mexico. These markets are especially important to Microsoft, where it is under threat from cheap open source alternatives and where software piracy is rampant.

Subsidising both expensive hardware and software makes sense in markets where neither are affordable. Similar user pays plans have led to a proliferation of mobile handsets worldwide.

AMD intends to develop processors designed specifically to support Microsoft FlexGo technology. According to AMD, through the joint development that is underway between AMD and Microsoft, Microsoft's FlexGo technology will also be incorporated within key AMD microprocessor products.

"AMD's joint effort with Microsoft on pay-as-you-go computing will help us reach our shared customers with technology they want in ways they can afford," said Will Poole, senior vice president of Microsoft's Market Expansion Group. "We are pleased to embark on this new initiative together, utilising AMD's deep knowledge of emerging markets to expand our trials to China, India and beyond."

AMD's chief innovation officer and senior vice president, Dr. William T. Edwards, said that the pay-as-you-go program using Microsoft Flexgo will deliver affordable, modern computing technology to people around the world. "We have seen great success under this same model with cell phones and we're very optimistic that Microsoft and AMD will enjoy the same kind of success with PCs.  More importantly, this new program will greatly accelerate AMD's 50x15 Initiative, which aims to connect 50 percent of the world's population to the Internet by the year 2015," said Dr Edwards.