Who Pays for Software Plus Services?

New York Times delivery subscribers will get the software for free, while everyone will pay $14.95 a month, or $165 a year, which includes access to TimesSelect.

Times Reader, which has been in beta, leverages capabilities found in Windows Presentation Foundation. No doubt, it's a sweet application, giving a very newspaper-like experience but with updating content. Last month, Associated Newspapers, Forbes and Hearst released digital news reader applications, too.

Timing of the New York Times recurring fee plan is interesting, as, coincidentally, Microsoft begins to more loudly tout the software-plus-services concept. I would define Times Reader as software plus services, for two reasons: 1) Content is delivered to desktop software for a monthly fee, and 2) There is the aforementioned fee.

Microsoft's software-plus-services approach will be very much about enabling businesses with customer-facing services to charge for them. It's the line of differentiation that Microsoft is drawing between its services platform and that of Google and other Web 2.0 companies. In the Google/Web 2.0 world, someone else pays. In the Microsoft/S+S world, you pay. Exceptions would be cases where the provider pays, because the service is infrastructure. Tellme Networks, which Microsoft is acquiring, is a good example.

One analogy: Subscription cable services, like HBO or on-demand sports, versus commercially-supported broadcasts. Certainly there is some overlap, with consumers paying for cable service with commercially-supported broadcasts.

Software plus services would skew services revenue towards subscriptions, while the Web platform approach is more about advertising support.

I'm not suggesting that Microsoft would forgo the advertising opportunity, particularly considering how little is spent online compared to how much is spent offline, particularly television.

Secondarily, Microsoft is seeking to pull computing relevance back from the Web. In the case of the news reader applications, Windows is a necessary element, because Windows Presentation Foundation is required.

.NET Framework 3.0 components like Windows Presentation Foundation are very much about extending Windows' utility to the Web, in essence attempting to make the operating system a necessary utility for consuming Web content and services, even more than it is today.

Times Reader offers a sense of the direction Microsoft is going and the company wants to enable itself and partners to make money through recurring subscription revenue.