Microsoft's new pay-as-you-go Office 365 subscription plans differ from traditional buy-once software in one important aspect: When customers stop paying, the applications stop working.

Although that makes sense -- Office isn't freeware -- and the practice isn't new to consumer software, the difference between buying and renting software will quickly become apparent when an Office 365 subscription expires or is canceled, according to information posted by Microsoft.

ZDNet blogger and long-time Windows watcher Mary Jo Foley first reported on Office 365's behavior after a subscription runs out.

Office 365 Home Premium, one of the two software rental plans introduced Tuesday, requires that customers pay $100 a year or $10 per month for the right to install and run Office 2013 on Windows and Office for Mac 2011 on OS X, on as many as five devices. The other plan, Office 365 University, charges $80 for a four-year subscription to the same Windows and OS X suites.

Those suites -- Office 2013 for Windows includes seven applications, Office for Mac 2011 has four -- are installed locally, and run, as traditional-style software does, from a customer's hard disk or SSD (solid-state drive).

But only as long as the subscription is valid.

Stop paying, and the applications are crippled, Microsoft noted in an extensive FAQ on Office 365.

"Once your Office 365 subscription expires, the Office software applications enter read-only reduced functionality mode, which means that you can view or print documents only, but you will not be able to create new documents or edit existing documents," the FAQ states.

The Office applications do not vanish from the hard disk or SSD, but retreat into that reduced-function mode. Documents created with those applications are untouched.

It's unclear when the read-only mode engages -- Microsoft's not been specific about the timing -- but warnings will be issued in the applications and via email after the subscription expires, but before the suite stops working full-time.

To regain the lost functionality, a customer must purchase a new subscription to Office 365, or buy a "perpetual license" copy of the suite: The latter is the familiar pay-once, use-forever type of license.

Alternately, Microsoft said, customers can reinstall an older version of Office, or use the free cloud-based versions of Excel, OneNote, PowerPoint and Word -- collectively called Office Web Apps -- to create new documents and conduct basic editing chores.

Because Office 365 by default saves documents to Microsoft's SkyDrive, an expired subscription also affects the online storage service. If a customers has exceed the 7GB limit for a free SkyDrive account -- Office 365 Home Premium and Office 365 University include an additional 20GB of storage space, for a total allotment of 27GB -- no additional documents or files can be added to the locker until space has been reclaimed.

Documents already on SkyDrive will not disappear, even if the 7GB free limit has been exceeded. They can be moved out of SkyDrive and to a local system at any time.

Microsoft isn't the first developer to reduce the functionality of expired consumer software: Antivirus vendors have been using the tactic for years.

Symantec's well-known Norton AntiVirus, for example, is sold as one- or two-year licenses, with retail prices of $50 and $80, respectively. When the purchased period expires, the software stops working -- Symantec's firewall is turned off, users cannot run a security scan, and so on -- and new malware signatures cannot be retrieved.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

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