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Microsoft: Streaming Office 'infringes license'

Company says British ISP selling a 'streaming' version of Office infringes on license regulations, but Fasthosts denies the claim.

Microsoft has said that the Internet service provider Fasthosts, which has started offering a subscription-based version of Microsoft Office 2007, is infringing on the software giant's licence regulations--but Fasthosts has denied this claim.

Earlier this week, the U.K.-based ISP and hosting company started selling a version of Microsoft Office which it advertised as being "streamed to your PC". However, unlike true hosted software, or software as a service (SaaS), it requires the user to download software to their client PC.

"Fasthosts' Microsoft Office product uses the SaaS model in that it is delivered and managed via the Internet," explained Mark Jeffries, Fasthosts' chief technology officer, on Thursday. Speaking with CNET sister site ZDNet UK via e-mail, Jeffries said that a "full version Microsoft Office, identical to the boxed product, is downloaded using a streaming service and saved locally on a user's PC."

"After one initial download, further small downloads are made for additional features and updates. When functions are used for the first time, features are seamlessly streamed in the background. The software is validated when connected to the Internet," explained Jeffries.

Jeffries claimed that Fasthosts' version of Office was the result of a partnership "with Microsoft and established market-leading experts in the field of software streaming." However, Microsoft has disagreed with this claim.

"Fasthosts is a valued Microsoft partner who we have a great relationship with," said Michala Wardell, head of antipiracy at Microsoft UK, on Friday. "At present, streaming Microsoft products like Office 2007 via the Web infringes our license regulations. Fasthosts has been informed of this and we are currently working with them to rectify this situation."

Fasthosts has not, as yet, responded to Microsoft's comments on the issue.

While Microsoft has been clear about its plans to start offering some of its products on the hosted model, it has not officially launched any business productivity products along those lines. The hosted model involves software running from a provider's servers and being accessed through a browser, rather than being installed on the user's machine.

Generally run on a subscription basis, the advantages of the hosted model for the user include not having to pay for the software upfront, not needing as much processing power on the client side, and being able to benefit from updates being applied on the provider's servers rather than on the client machine. The disadvantages include a reliance on continuous Internet connectivity and the fact that the software can end up costing more than a boxed version if used over a sufficient length of time.

Jeffries also claimed that Fasthosts will shortly launch an "offline" mode for its Microsoft Office software service, "which will allow users to utilize their software offline, with only the occasional need to validate the software by connecting to the Internet."

The FAQs section of Fasthosts' Web site suggests that the service can be used to upgrade an existing installation of Office 2003 to Office 2007. Asked whether a user doing this would then invalidate their original Office 2003 installation if they stopped their subscription to Office 2007, Jeffries said: "Fasthosts' Microsoft Office software works independently of other Microsoft applications stored locally. Upon cancellation, the Fasthosts Microsoft Office would automatically uninstall."

Another notable element of Fasthosts' version of Office is the fact that its cheapest iteration, the educational version, priced at 4.99 British pounds ($9.71) per month, does not--according to the FAQs--require "evidence of eligibility" to be passed on to Fasthosts. This is not normally the case with educational licenses, which usually require some evidence to be shown to the retailer to prove that the user is indeed in an educational institution and not just trying to get a cheap version of the package.

"Fasthosts customers are asked to self-certify using the guidelines provided by Microsoft," said Jeffries in his e-mail to ZDNet UK.

David Meyer of ZDNet UK reported from London.