“When you haven’t got the dough, try pay-as-you-go. That could be a potential axiom for the nifty business model launched in Brazil today by Microsoft. After several market trials, the company is announcing the release of computers powered by FlexGo, a technology which lets users pay by the hour using cards bought from local vendors,” Parmy Olson reports for Forbes. “If you’re familiar with the pay-as-you-go method for cell phones, FlexGo uses a similar system. A customer who buys a FlexGo-powered PC would pay half the normal retail price at a shop, and would from then on purchase multicolored pre-paid cards to get hourly access to the computer.”
“The users would type in the card number via a program in Windows, and if they card runs out, the computer stops working. A PC that normally sold for $600 would go for around $300 with 10 hours of usage time included, and the pre-paid hours would go towards paying off the computer,” Olson reports. “In a statement Microsoft, led by co-founder and Chairman Bill Gates, said the new method brought ‘the flexibility of an Internet cafe into the home,’ and allowed users to avoid high fixed-monthly loan payments required to finance a PC.”
Full article here.
MacDailyNews Take: An interesting idea. Rent-to-own personal computers. Eventually, users pay off the PC and own it outright. It could be used as a way to get a more expensive PC than one could afford to buy – sort of like vehicle leasing.
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Poor suckers, buy a 5 hour card, and spend 1 hour on the net and 4 hours repairing again.
Sounds retarded to me.
Of course a Microsoft IT Weenie will come out remove the viruses on the computer and debug the Microsoft software they are renting you.
Subscription taken down to the ‘Nth’ degree. You stop paying and you no longer have a computer.
You bring up an interesting point WJ. When one is faced with computer problems that arise from a flaw in the design of the operating system, will that person have his/her card billed against that problem. I’ve seen some nasty pop-up/messenger malware that completely takes over a system. So, to the billing system it would appear that the person is using the computer when, in fact, it has been hijacked.
I think they will hit it big if it is as easy as it sounds. I didn’t read the article though.
“financing” or putting up as little capital up front as possible has caught like wild fire for a reason.
This country does not know how to save money and be patient any more. When anyone will give you credit without hesitation, why should they.
Suckers
MDN: History, what does history tell us?
That sounds secure. Whatever happened to Passport?
What’s to stop someone just cracking the software (stuff like this always gets cracked eventually) and end up owning a cut-price, high-end PC?
An interesting idea. Rent-to-own personal computers. Eventually, users pay off the PC and own it outright.
Somehow it doesn’t actually say that! There is no statement in the story as to when the PC is owned by the person. Gee it comes with a free first 10 hours. How much time did you spend on your new Mac when you fired it up. That 10 hurs will beburned up in the first day.
Where is the extra info on rent to buy? How much will it actually cost these guys to own that wonderful windows box??????
Leo
You really think the pay-as-you-go scheme will end once the computer is paid off? The article doesn’t mention what the payoff rate will be — they could well be paying on this thing for years.
Think cellphones. You might rent the phone, or you may own it, but you’re still going to pay handsomely for the connectivity that makes it work.
I think this is a test case for a new market model — pay-as-you-go hardware loaded with pay-as-you-go software.
Look at what MS is trying to accomplish with URGE. They want to rent your music to you. Subscription-based model.
Take a look at Microsoft Office Live:
http://officelive.microsoft.com/?xid=A0603003EK0000246803
$29.95/mo will buy you the *online use* of their live collaboration software. This is definitely where Microsoft is going — rental software coupled with rental hardware.
Sad thing is, they’ll probably make a killing on it.
MW: because — “because” people are sheep.
Sleeve.
Can you be specific about what is retarted about the plan?. Have you ever been to Latin America?
In that part of the world the average person doesn’t have $800 to blow on a computer. Not to mention that utilities, phone service, and other things are expensive which we take for granted in more developed nations.
MS ideas is great. Give consumers something for less (even if it isn’t a great system) and allow them to pay as they go for the most important computer tasks. In the process MS locks up they lock up more customers. What is Apple doing in Brazil?……nothing
MS has been wanting to penetrate Brazil for a long time because it is a market 5 times the size of Canada (no offense to my canadian friends) and the Brazilian goverment is a big supporter of open source technologies which MS is trying to fight off. I find this to be a great idea
I’d love to see Apple do something like that but I don’t think they will since it likes to charge a premium for its products and Latin America has been pretty much ignored by its management.
Sounds like an offer you simply can’t refuse, if Microsoft has its way.
More correctly put, “Gouge-as-you-go”.
First you pay for the computer, then you pay for the right to use your computer. It’s not surprising that an idea like that is coming from Microsoft.
Managers that are blinded by dollar sign’s floating in front of their face and ignore what consumers want and are willing to pay for are domed to fail.
Microsoftst new pay as you go program for a computer: $300
New 10 hour card: $50
Hammer at the local Brazillian Ace Hardware store to fix computer: $25
Time wasted Ctrl+Alt+Delting and Bluescreen-Surfing: Costly – But Priceless
MasterCard + Microsoft, Where Aren’t you going today?
I wonder what sort of security is included with it. What prevents people from buying a computer for half price, reformating it, pulling out cards, whatever and using it without MS’s little scheme. Or just taking it for parts. Either brazilians are very honest people or some of them were just given a very profitable businesss.
MDN: two points for not tearing the idea apart just because it’s microsofts but your take just resates the article and the obvious. It makes me feel like I’m being talked down to.
and who gets to reimburse the user for downtime, virus and other usual windows crap ????
Although you must pay as you go, and you will eventually own the computer when you’ve paid enough, I believe that you actually own the virus the first time you use it, and it’s yours to keep forever. Or, would the virus own you?…
The real reason behind this is something that Bill Gates has been trying to get going for many years. He wants to “rent” you the apps. You would no longer own Word, Excel, Powerpoint, Access, etc. Instead, you pay a lower amount per year and you get to use the latest version of the app. You stop paying and it stops working. That way, he doesn’t have to worry about people that feel that Word 2003 is good enough for the next 10 years, so they don’t upgrade.
E-V-I-L…
surprisingly, this a good idea.
You would have to be really stupid to sign up for this. It’s just like those ads for cheap PC loans. Do the math and you’ll realize that it will cost easily 1500 bucks over the loan lifetime for a cheap and nasty PC. Way better to scrape together 200-300 bucks and get a crap Dell box.
The same deal here – add up the cost and you’ll easily save money very quickly buying a machine outright.
Even with the P17 inch PB I bought 2.5 years ago, the 3 grand I paid equates to at least 2000 hours of use. At 5 bucks a hour that would equal 10 grand! Granted we use the mac a lot, but considering it is a high end machine to come out on top compared to the rental model says a lot.
You don’t know the history of being talked down to. I do.
“The users would type in the card number via a program in Windows, and if they card runs out, the computer stops working.”
Oh good, yet ANOTHER way to get a PC to stop working!
JEG, don’t think for a second that MS is doing this to help the poor Brazilians who can’t afford a computer. This deal is no more honorable than the millions of payday loan stores that have popped up on every block over the last few years. Gates has one thing in mind – getting people’s money in his pocket. It’s really no different than the crack dealer who gives the first dose away for free. Once MS has you, it’s hard to get away.
If I had to pay by the hour to use my G5 then it would have cost me over $100,000…
give it a month the protection scheme will be hacked, the pre-payed cards cloned, and the HD removed and replaced with a “working” os.
A poor family in Latin America buys one of these computers under the rental/hourly program. Mom and Pop tell the kids “Only use the computer if you have to” because it is costing them by the hour for its use. This is no way to encourage computer use among the third world. Better would be give them the computers and give them minimum software and let them go at it. Through the internet people learn about the world. They get experienced using your software and will continue using it (assuming it is usable to start). Their next computer they can buy from you as an upgrade/trade in. Microsoft has the money to do this.
ndelc.
On my note I clearly stated that MS wants those customers locked to their technologies. Doesn’t Apple want customers locked to its technologies?. MS reason for doing this is strictly business and I never said that it is to help people. It is a fact that the disposable income in Brazil is much less than in the North America/Europe and MS does this to sell to a segment that otherwise it couldn’t.
Brazil is the Americas 2nd largest market/economy and MS knows this. It has around 150M people and MS doesn’t want open source technologies to take off there. Brazil’s goverment support for open source is the reason why MS is doing this (it is hard to compete against free software). I don’t believe MS is doing it because they want to rent software although I admit that it may want to in the future.