Microsoft on Friday confirmed it is planning to release a subscription-based "value box" of low-end productivity software code-named Albany, and has sent an early version of the product to thousands of beta participants for private testing.

News surfaced last month that Microsoft was planning the suite -- a combination of Office Home and Student 2007; Office Live Workspaces; Windows Live Mail, Messenger, and Photos client software; and Windows Live OneCare -- to compete with Google Docs and other free or low-cost productivity suites available in the consumer market. Microsoft late last month sent out select invitations to test Albany, asking people to sign nondisclosure agreements just to sign up for the test, sources close to the company said at the time.

However, Microsoft Product Manager Bryson Gordon said that Albany -- which the company internally had called a "value box" of software -- isn't simply a productivity play. "The free applications online address one portion of this," he said.

Albany goes beyond that and provides what consumers have told Microsoft are the "essential" products they use on a computer, Gordon said. "It extends both into the security value proposition and extends into the category of helping people connect and share with others," he said.

In addition to Word, Excel, and PowerPoint applications found in Office, a plug-in for Office Live Workspaces in Albany will give customers the ability to store and share documents online from directly within the Office interface. Albany also covers basic PC security needs with Windows Live OneCare, Microsoft's service that includes firewall and antivirus protection, as well as basic consumer e-mail, instant-messaging and photo-sharing needs with the Windows Live software.

Albany suggests that Microsoft recognizes it must differentiate Office from less costly or even free software such as Google Docs or IBM's Symphony. These suites threaten to commiditize the consumer market for productivity software, where low-end versions of Office, for now, remain prevalent.

While people can separately purchase or download all of the products that will be a part of Albany, a key feature of the package will be that it provides for unified installation instead of customers having to install all of the offerings separately. "We don't want them to go through a cumbersome process to set this up," Gordon said.

Albany also will feature a "welcome" window that shows customers all of the features and offerings in the suite and from which customers can begin using the software, he said.

Microsoft has not set pricing for Albany yet, saying only that it will be sold on a subscription basis. Whether that subscription will be monthly or yearly also has yet to be determined. Moreover, the company is still deciding through which channels Albany will be sold, although sources close to the company previously said retail outlets such as Best Buy would be among places people could purchase it.

Gordon said Microsoft is not planning a public beta for Albany, which it expects to release before the end of the year. The company will use the feedback from the private beta to come up with a final version of the product.