Microsoft to Launch New Licensing Option for SMBs

The new licensing option allows SMBs to subscribe to Microsoft software licenses for a three-year term, said Eric Ligman, senior manager, community engagement for Microsoft's small business unit.

During that term, all purchased licenses are covered under Microsoft's Software Assurance program, which means that VARs and their customers receive all patches, service packs and upgrades for that software. They also get rights to any new versions of that software released during the three-year term, he said.

Ligman said that while the new program is not technically a lease, it is similar. VARs sell their customers subscriptions to non-perpetual licenses for Microsoft software packages in three-year terms at a lower cost than they would pay for a perpetual license for the software, he said.

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When the term is up, customers can choose to renew their subscription for another three years, buy out the license fee and convert their licenses to perpetual ones, or not to continue with either option, Ligman said. If customers choose the third option, they must uninstall all subscription software.

Paying for a subscription model like this instead of buying a perpetual license saves money, since the subscription cost is lower than buying the software outright, said Stuart Crawford, director of business development at IT Matters, a Microsoft partner based in Calgary, Alberta, Canada. Crawford said the inclusion of upgrades and new software versions also helped keep costs down for his customers.

"We've been a strong proponent of this type of leasing or subscription model for a long time as a way to preserve our small customers' cash flow," he said. The launch of this program in the United States and Canada gives Crawford's company another way to serve his clients, most of whom are SMBs with fewer than 25 seats, Crawford said.

While the current worldwide version of the scheme allowed partners to buy software licenses for use on individual or on a small number of PCs, the new U.S. and Canadian programs will require partners to buy at least one Microsoft software program and deploy it across their customers' entire enterprise, Ligman said. After that requirement is met, partners can add other software a la carte, Crawford said.

"The benefit with this program is that VARs can offer their customers the opportunity to standardize on Microsoft technology across their entire company," Ligman said. If customers already have infrastructure with the current version or the version immediately prior to the current version of the Microsoft software installed, they are given credits toward the cost of the subscription, he said.

Payment options are flexible, Ligman said, and allow partners to either pay for the subscription in full up front or spread the payments over the three-year term of the subscription. Microsoft financing is also available to help SMBs regardless of their software budgets, Ligman said.

He said that since the program fell under the umbrella of the existing Open Value structure, all Microsoft resellers could take advantage of the new program when it is released on March 3.

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Microsoft is extending its Open Value Subscription scheme to small and midsize businesses in the United States and Canada.