Microsoft Simplifies Its Volume

By Peter Galli  |  Posted 2007-09-07 Print this article Print

Licensing Programs"> Microsoft is trying to simplify its complex volume licensing programs and the customer agreements that fall under them. As part of that initiative, the Redmond, Wash., software maker has slashed the number of price points and product SKUs in the different programs, and updated the language and the content flow in each agreement to give consistency across all volume licensing contracts.
Navigation has also been improved, with a new table of contents and summary titles, and a new signature form is being introduced for a single signature event with the customer, said Stacie Sloane, Microsofts director of marketing and communications for worldwide licensing and pricing.
Microsoft has also reduced the length of the agreements under its Enterprise, Select License and Open License programs by as much as half, depending on the program. As an example, Enterprise Agreements have been reduced from 13 pages to 12 pages, or from eight pages to four pages, depending on the specific situation, Sloane said. Microsoft flip-flops on Vista virtualization. Read why here. The changes are important, as volume licenses are used by Microsofts largest customers to buy, manage and administer software. The changes are a solid step in the right direction and will make contract administrators, purchasing agents and IT executives happier, according to Rob Enderle, an analyst with The Enderle Group. However, he added, the long-term problem for Microsoft is that IT buyers are questioning the value of what they are purchasing, and these licensing moves do not address that. "The real problem behind volume licensing is the customer belief that they are overpaying for things they do not need. To address this, Microsoft needs to increase the perception of value for the solutions that fall under these licenses," he said. While these changes will reduce the overall aggravation customers have had with volume licensing, they do not address the dissatisfaction that is driving the Microsoft customer base to seek alternatives, Enderle said. Earlier this year, however, Kevin Turner, Microsofts chief operating officer, boasted about increases in Windows volume licensing. This was the "best rate weve seen in many, many years," he said of annuity licensing contracts, acknowledging that Windows Vista Enterprise and the Microsoft Desktop Optimization Pack were major drivers of this. But Microsofts oft-delayed product road map may have created a perfect storm against software upgrade contract renewals. According to Forrester Research analyst Julie Giera, an unprecedented number of Microsoft customers are facing licensing renewal decisions this year, and many of those with Software Assurance are questioning the offerings future value. "The economics of buying Software Assurance, at 29 percent of the licensing fee for desktops for the next three years without any guarantee that theyll recoup their investment, is making holding off buying new licenses until they are actually needed an attractive option," she said. Lengthening release schedules, uncertain product road maps, and the complexity, cost and time associated with installing a new release make the value of this program even more uncertain, Giera said. Read here about the new licensing terms for Windows Server virtualization. Among the latest changes is a new signature form that the customer has to sign, which replaces the signature block on individual documents and consolidates the signature of all documents associated with a customers program. Customers can now "use one signature form for multiple enrollments on a single program type, and a single customer representative can sign all enrollments," Sloane said. Page 2: Microsoft Simplifies Its Volume Licensing Programs

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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