MICROSOFT HAS DROPPED the pilot for its Office XP End User Subscription Licensing (ESL) program, an initiative that saw consumers rent copies of the office productivity software at discounted prices.

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Under the ESL, consumers could rent a version of Office XP at well below the normal boxed price, but the license was not perpetual. This meant that the software would expire at the end of the subscription period.

Microsoft said it had received a great deal of feedback from reseller partners and customers, and came to the conclusion that the consumer market was not yet ready to adopt the subscription model.

The pilot was run in Australia, France and New Zealand and, had it been successful, would have been rolled out globally. Although no figures were given for exactly how many consumers took part in the trial, Microsoft Australia product manager Tony Wilkinson estimated that over 10,000 customers had purchased the license in Australia. He said this was in line with Microsoft's expectations, and that demand for the licensing scheme was not the problem.

Instead, it was a misunderstanding by customers that caused the model to fail.

"A large enough percentage of these customers did not realize that the product would expire at the end of the subscription period," Wilkinson said. "A lot of people were attracted to the price point and thought they had just scored a bargain."

Retailers had understood the model well, Wilkinson said, but their customers were not "ready to embrace the subscription concept."

Wilkinson said that Microsoft, and the market in general, is trying to move towards "software as a service", but the trial has indicated that it will be some time before the model is understood in the consumer market. He is confident, however, that Microsoft will eventually revisit the model. "I still believe the subscription model makes sense," he said.

Customers who took part in the trial have been offered a free upgrade to a perpetual Office XP license.