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 Forbes.com 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.

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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.


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