Microsoft Friday popped the cork on its plans to sell software through subscriptions, rather than through licenses as it now does.

The company also announced how it expects to recruit service providers to its new strategy. In the first in a series of Windows- related initiatives expected to be introduced over the next two years, Microsoft unveiled details on how it plans to sell software through application service providers (ASPs), or companies hosting software programs that are usable over the Web. Under the new plan, businesses will not buy copies of Windows or Microsoft Office software with a PC. Instead, they will effectively rent software from ASPs and pay a per-user monthly fee to use the software. The more applications each individual uses, the larger the monthly fee. Whether this new strategy will help customers save money remains to be seen. One analyst pointed out, however, that after reviewing prices under a pilot program it seems that the subscription method could cost more than buying software outright after two years of use. "The prices look high when you compare them to the regular shrink-wrap prices of software," Gartner analyst Neil MacDonald said. "Basically, Microsoft has taken their shrink-wrap software price and divided it by 24 months." Because most Microsoft customers keep their software more than 24 months, "most people are going to find these prices expensive," MacDonald said. "I expect (Microsoft) will go through restructuring at least twice before they settle in on a pricing model."