Office applications in Microsoft's recently announced Albany software subscription bundle will collapse into limited functionality if users let their subscriptions expire, Microsoft said Monday.

Albany's Office software will be installed locally, but if users let their subscriptions expire, they will not be able to create or edit documents. In addition, users will not receive updates to the OneCare security software.

"A customer who decides not to renew will still have access to his Office documents, and can also choose to replace his Albany subscription by buying a Microsoft Office perpetual license and Windows Live OneCare separately," says Bryson Gordon, group product manager for Microsoft's Office Consumer & Small Business Team.

Microsoft is using its antipiracy software to control the feature set of the Office applications in Albany, much like the "kill switch" technology it had in Vista but eventually pulled due to complaints from customers who said it was crippling legitimate copies of the operating system.

The RFM (Reduced Functionality Mode), as Microsoft calls it, is part of the company's SPP (Software Protection Plan) unveiled in late 2006. Office was placed under that initiative shortly after RFM was announced.

Albany, which went into private beta Friday and is expected to ship at the end of the year, is aimed at the consumer market. Microsoft is battling against low-cost and no-cost suites of productivity applications such as Google Docs and IBM Symphony.

While Microsoft has not announced pricing for Albany, its subscription price will be more attractive than paying $120 retail for a perpetual license on Office Home and Student 2007. Albany uses that version as part of its bundle.

Microsoft has not revealed details or pricing for its subscription model, including whether there will be monthly or yearly options. But an accumulated fee over a year or several years that comes anywhere close to $120 would give users pause about buying a product that could eventually prevent them from creating new documents or editing their own documents.

The Albany bundle, however, will allow users to install the software and services on up to three computers, where the perpetual license allows only one installation.

In addition, the Albany bundle includes Windows Live OneCare, a security service that includes antivirus/antispyware and backup and restore. The service on its own for a single computer costs approximately $50 per year.