Microsoft is betting that people would rather fork over $US20 a year for the legal right to use its Office application suite than install an old or pirated copy or use one of a growing number of free alternatives. Having been faced with that exact decision myself this week, I think that's a pretty safe bet.

This week the company unveiled Equipt, a subscription service for its Office apps that will initially be available later this month through about 700 CircuitCity electronics retailers; the deal is not exclusive. Formerly code-named Albany, the service provides Office Home and Student 2007 for just $20 over the $49.99 annual cost of its Windows Live OneCare security package, when the two are purchased together. At retail, Office Home and Student costs $149.

Equipt will include 2007 editions of Word, Excel, PowerPoint and OneNote, Microsoft's notetaking and collaboration tool. OneCare delivers anti-malware with automatic definition updates, firewall, centralized file backup, performance tune-ups and other services. The Equipt subscription can be installed on as many as three PCs and also includes updates for the Office apps. Use of Windows Live ID, Microsoft's single sign-on (formerly .NET Passport) technology, is required.

The service offers the option of saving documents "in the cloud," using Microsoft's Office Live Workspace service, also included. Microsoft is positioning Equipt at consumers, students and anyone buying a new PC. But for such budget-conscious buyers, minimum system requirements for Equipt seem a bit excessive, even for Microsoft. Specs call for a 2GHz or faster processor, 1GB RAM and 4GB hard disk space.