Will pay-as-you-go stop pirates?

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Piracy of intellectual property--including software, music and movies--is a huge point of contention between the US and less IP-sensitive countries. Last year, for instance, a Russian website accused of illegally distributing music files fueled a dispute between Russian authorities and the US Trade Representative's office.

Enforcement of IP laws is lax but getting better in many parts of the developing world, especially in countries that are cleaning up their act in hopes of gaining WTO membership (Ukraine, China). Beyond poor enforcement, another reason why piracy is so rampant is because the price of software in developing countries is just too high for the local market. It's easier for many to just buy priated copies at reasonable prices and take the gamble of breaking the law. Even if they are caught, the legal consequences are usually minimal.

Microsoft's South African division is hoping to gain market share and combat piracy at the same time with the introduction of a pay-as-you-go software subscription. Instead of forking over $700 for a legal copy of Microsoft Office, users can subscribe to Office for as little as $10 per month. Microsoft will also open up the subscription service to users in Romania.

Beyond just combatting piracy, Microsoft's move could also be a first strike to prevent the developing world from embracing Google Apps, a $50/year web-based software package offering many features similar to Microsoft Office.