Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Mr. Softy Gets Cheap

I'm a computer guy, but even I recognize the hassle that comes with, well, being a computer guy. Personal computers (especially the Macs that I prefer) are expensive, and they become even more so over time as you pay for upgrades, service, and so on.

A number of potential solutions have emerged to address this problem. Google (Nasdaq: GOOG  ) , for example, is cobbling together a suite of Web-based applications that, theoretically at least, would never have to be upgraded by users. Everything would be taken care of on the servers where the software resides.

Microsoft (Nasdaq: MSFT  ) joined the battle with the introduction of Windows Live, and it added another salvo Monday by teaming with Advanced Micro Devices (NYSE: AMD  ) to debut a new pay-as-you-go model for low-cost computers, dubbed FlexGo.

FlexGo is a technology platform that approximates the pay-per-use cell phone model in a PC. Consumers pay 50% of the retail cost of their computer and a certain number of prepaid usage hours. More hours are purchased by way of prepaid cards. When the hours run out, the computer stops working.

FlexGo computers are being made available in Brazil now under a pilot program. Further rollouts are planned for Mexico, China, Russia, and India. That makes sense. Open source is a highly attractive option in overseas markets because of the tendency of Linux-powered systems to be both functional and cheap. FlexGo creates an opportunity for those consumers to try Mr. Softy's wares for about the same price.

But can the model work long term? Microsoft seems to think so. According to a story from Monday, FlexGo could earn the company as much as it earns through classic computer sales. If true, that would be a boon. Microsoft is under intense competitive pressure. The presumption had been that it would have to spend its way out of trouble, but obviously innovation would be a better alternative. In that sense, FlexGo could be just the cure Dr. Gates needs for his ailing business.

Related Foolishness is yours at no extra charge:

  • Brrrrrrr! It's the winter of Redmond's discontent.
  • Come on, Google. Please stop whining.

Microsoft is a Motley Fool Inside Value selection. Ask us for anall-access passto the service and you'll be privy to chief advisor Philip Durell's best picks, which are collectively beating the market by more than 4%. You'll also receive instructive lessons on valuation and company analysis. Give Inside Value a try. It's free for 30 days.

Fool contributorTim Beyershas five computers in the house. He loves the idea of leasing his next Mac. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 513795, ~/Articles/ArticleHandler.aspx, 10/28/2016 10:26:41 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,182.90 13.22 0.07%
S&P 500 2,132.04 -1.00 -0.05%
NASD 5,210.36 -5.62 -0.11%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 10:10 AM
AMD $7.30 Up +0.19 +2.60%
Advanced Micro Dev… CAPS Rating: **
GOOGL $835.12 Up +17.77 +2.17%
Alphabet (A shares… CAPS Rating: *****
MSFT $60.18 Up +0.08 +0.13%
Microsoft CAPS Rating: ****