Will "Pay-As-You-Go" Computing Work?

By January 05, 2009

Everyone’s talking about Software-as-a-Service, but Hardware-as-a-Service? Microsoft is planning something like that, unveiling plans for a "pay-as-you-go” computer that would allow users to pay for their hardware and software hourly, and as they need them. The PC itself would be either free or come heavily subsidized, like cell phones. The idea makes sense, as computers are often more powerful than their users’ needs require, and basic tasks such as Web browsing and email probably take up more computing time than higher-performance needs such as gaming or video editing. The computer is scalable, allowing users to pay specifically for their needs, and nothing more. “For example, the Office bundle may be $1.00 per hour, the Gaming bundle may be $1.25 per hour and the Browsing bundle may be $0.80 per hour,” says the patent.  It is enticing to think that a casual gamer could own a system with good gaming specs without paying thousands of dollars for limited gaming hours.

This is a sort of dynamic pricing that we’re seeing more and more companies take as a business model. Recently, the San Francisco Giants announced that their ticket prices would be based on daily variables, such as starting pitcher, opposing team, and weather. Pricing real-time computing needs instead of one lump-sum payment could be a step in an interesting direction for personal computing, if the business model proves viable.

In theory, Microsoft’s idea is a good one, though it’s hard to see how this pricing system will be implemented. In order to compete in a market where the prices are consistently falling, it must be able to offer a powerful computer at a very low price if it wants to compete with netbooks, smartphones, and gaming consoles and lower-end gaming rigs. And if it could put such a machine on the market at low production cost, wouldn’t that accelerate Moore’s Law even more?

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