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Microsoft adds Office, Windows rental option

Software maker adds a licensing option for outfits like kiosks and business centers that rent out PC time.

A new option allows those that want to rent out PC time, such as airport kiosks, business centers and Internet cafes, to be properly licensed by paying Microsoft a one-time fee for each machine being rented out. Microsoft

Although there are plenty of places that rent out time on Windows-based computers, doing so had never been strictly, speaking, legitimate.

The licensing terms for Windows (and Office) prohibit such use even though there are thousands of Internet cafes, business centers, and kiosks that do so. Starting January 1, though, Microsoft added an option for those that wish to rent out Windows or Office to do so by paying an extra fee.

"Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party," Microsoft notes on its Web site. "As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafes, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements."

The new "rental rights" option adds a waiver of the licensing terms, allowing such use in exchange for a one-time license fee for each Windows PC or Office copy being rented out.

"Rental Rights are a simple way for organizations to get a waiver of these licensing restrictions through a one-time license transaction valid for the term of the underlying software license or life of the PC," Microsoft said.

In an effort to boost initial sales of the option, and perhaps ease the burden of having to pay for something that many organizations were doing for free, Microsoft is offering 30 percent off the license fees for those that sign up by June 30.

News of the new option was reported earlier on Monday by, among others, ZDNet blogger Mary Jo Foley.

Foley quotes Directions on Microsoft analyst Paul DeGroot as saying that the rental add-on for Office Professional, with the discounts, is $58, while Office Standard costs $45, and Windows is $23. Those are one-time fees good for the life of the PC or underlying Office license and are in addition to the cost of the copy of Office or Windows itself.

Update, 12:15 p.m. PST: I had a chance to catch up with DeGroot and get some additional thoughts on Microsoft's move.

Until Microsoft added this option, DeGroot said, Microsoft really only had the option of threatening to shut down a business or potentially pushing rental businesses toward Linux and OpenOffice.

Plus, he said, kiosks and business centers serve an important role for business people and consumers.

"One of the problems with enforcing this was there wasn't an easy way for people to do this, yet it is incredibly useful," DeGroot said. "As a result I think Microsoft kind of tolerated this."

DeGroot said the new option stemmed from Microsoft's antipiracy efforts in emerging markets, where much of the focus was to keep such places from using pirated copies of Windows and Office. Technically though, even buying legit Office and Windows still wasn't making customers legal. With the rental option, Microsoft has a way, particularly in mature markets, to allow such businesses to be legitimate.

The discount and the fact that the fee is one-time and not an annual bill, could help ease the cost of the rental license. "They are not all that expensive," DeGroot said, noting the fees are less than the cost of the original software.

One of the key questions is that, now that it has such an option, how aggressive will Microsoft be in making sure business centers and cafes are actually paying the extra fee.

"I think that you may see more enforcement," DeGroot said, but added the company may still ignore smaller infractions.