Microsoft Reconsiders Licensing Plans

Microsoft is looking at new ways to make its relatively unpopular Licensing 6 and Software Assurance volume licensing agreements more beneficial to the customers most negatively impacted: small and medium-size businesses.

Microsoft Corp. is looking at new ways to make its relatively unpopular Licensing 6 and Software Assurance volume licensing agreements more beneficial to the customers most negatively impacted: small and medium-size businesses.

Some options under discussion within the Redmond, Wash., software developer include additional support for customers as well as free training, the level and extent of which would depend on the actual agreement.

"Talking to customers, particularly those small-to-medium-size businesses, we have found that they want some level of training included as part of their licensing agreement, while our enterprise customers have said they want manageability of their environment," said Mike Sinneck, Microsofts corporate vice president of worldwide services, in a recent interview with eWeek. "We are committed to adding additional value to Software Assurance for all customers."

Microsoft executives all the way to CEO Steve Ballmer have admitted the new licensing plans were poorly presented and negatively impacted some customers. In fact, the licensing plan could well have prejudiced the future product buying decisions of the 20 to 30 percent of Microsoft customers at the SMB end of the market that saw price increases, said Paul Flessner, senior vice president of the .Net Enterprise Server group.

"Out of 50 calls I made to customers recently, I got a couple of pastings about the licensing issue," Flessner said. "But we are being very flexible with those customers who feel they were disadvantaged."

Sources said key Microsoft executives are scheduled to meet next month to try to hash out the specifics of what value they can add to the various customer groups. They will do so aware of the need not to further upset or alienate those customers that are evaluating alternatives.

Nevertheless, customers remain skeptical of the companys motives and say it will take more than platitudes, a few tweaks and a couple of hours of training to make amends.

"These promises of more value are nothing but classic damage control. You affect peoples wallets, and youve got a war, as Microsoft has found out," said John Persinger, an internal network administrator for Source4 Inc., in Roanoke, Va. "They need to realize that their licensing scheme is a joke and that they need to rework it completely to make it acceptable."

Dave DeBona, an IT consultant for a national brick-and-mortar and online retailer, said it was unfortunate that small customers had borne the brunt of the new policy.

"Im not sure offering free training is a valid offset, since in tight financial times, training seems to be one of the first items scrutinized. Reworking the entire license agreement would be more helpful," said DeBona, in Springfield, Ohio.

A midsize-business customer in Illinois, who requested anonymity, said he and a number of his colleagues are actively looking at alternatives to Microsoft software. "I hear the words and the promises," said the customer. "But experience has taught me that Microsoft will overpromise and underdeliver on this, as always."