Microsoft still has a variety of issues with its software licensing structure, according to a new research note by two analysts at Directions on Microsoft. Previous attempts at restructuring the often-complicated licensing for Microsoft products has resulted in benefits to the enterprise, particularly with new technologies such as virtualization. Windows 7 has the potential to introduce new licensing issues upon its general release on Oct. 22.Microsoft
licensing is likely to remain "unwieldy" in the near future, although
solutions to licensing issues do exist, according to a new research note by two
analysts linked to Directions on Microsoft, an independent organization that
tracks the company.
The Sept. 8 research
note by Rob Horwitz, CEO and founder of
Directions on Microsoft, and Paul DeGroot, the organizations research vice president,
breaks down five reasons why Microsoft licensing is supposedly difficult:
1. A Variety of Products and Markets
The sheer size of the Microsoft product portfolio, coupled with the companys
global reach and multiple markets, means a "one-size-fits-all product
packaging, licensing and pricing approach couldnt possibly work."
2. Decentralized Decision Making
The different product groups within Microsoft decide their licenses and
pricing, often independent of the companys central licensing division. Each of
these product groups operates with an eye toward its own competitive profile
and revenue generation.
3. New Technology
Technological innovations such as multicore processors and cloud computing can
force Microsoft to adjust its licensing structure, which in turn can complicate
life for customers as new rules and exceptions are introduced.
4. Limited Enforcement and Compliance Tools
"Most Microsoft products do not include features to help medium and large
organizations match product use to license purchases or comply with license
usage rules," Horwitz and DeGroot write. "Customers are responsible
for building the complex infrastructure and processes necessary to police
themselves." This can lead to excessive purchases of licenses or
inadvertently signing up for programs such as Enterprise Agreements.
5. Lack of Inventive
According to the research note authors, "Microsoft executives dont see
current licensing policies as a problem and the executives are reluctant to
tinker with such a complex system." The sheer amount of effort and cost
involved in restructuring licensing policies also acts as a drag on the
potential for system reform.
Directions on Microsoft offers boot camps a number of times per year,
designed to help IT administrators, corporate negotiators and procurement
specialists drill down into Microsoft licensing concepts, terminology and
modelsas well as deal with situations such as licensing products under
virtualized scenarios.
Historically, Microsofts
adjusting of its licensing structure has made it easier for the enterprise to
incorporate new technologies into its IT infrastructure, according to a report
by Forrester Research issued earlier in 2009.
For example, Microsoft updated its Windows licensing for desktop
virtualization at the start of 2009, opening its Vista Enterprise Centralized
Desktop (VECD) license to cover desktop virtualization for non-corporate PCs.
This freed outsourcers and contractors to connect to a hosted desktop
environment, at a cost of $110 per device per yearbelow the list price of
$199.95 for Vista Home Basic and XP Home, and $319.95 for Vista Ultimate, any
of which would otherwise need to be purchased if the VECD hadnt been
adjusted.
According to the Forrester report, that adjustment in the licensing opened
up contractors to using their own PCs at a companys office, or employees to
using their own PCs at work.
"While just one year ago, Microsoft handcuffed many organizations that
attempted to legally license Windows Client in a virtualized world, they have
made steady improvements to pave the way for new computing models,"
Forrester analyst Natalie Lambert wrote in the April 9 report.
"Specifically, models that move away from a standard, physical corporate
PC."
However, the upcoming release of Windows 7 could unleash a new round of
licensing entanglements, per Horwitz and DeGroots own research note. Microsoft
needs its new operating system to be a hit within the corporate world in order
to reverse a declining revenue trend. Most recently, Redmond
offered IT administrators and other professionals a free 90-day trial version
of Windows 7 Enterprise in
an attempt to disseminate the platform throughout offices on the eve of its
general release on Oct. 22.
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