Microsoft Boosts Licenses, Opens Passport

Companies hoping for a price break under Microsoft's new licensing policy will be sorely disappointed, industry analysts say.

Companies hoping for a price break under Microsofts new licensing policy will be sorely disappointed, industry analysts say.

Starting Oct. 1, the software maker will move many of its most popular enterprise packages, such as Office, to a new subscription system that could raise the price 33 percent to 107 percent, according to Alvin Park, Gartners senior research analyst.

"Theyve changed the licensing programs and eliminated the least expensive and most widely used methods of upgrade," said Park, who interviewed 300 companies for his research.

Under the new Software Assurance licensing system, Microsoft asks companies to buy upgrades in multiple-year increments — at a higher yearly price.

"They want to get folks on an annuity revenue stream," Park said.

Microsoft spokesman Don Leach said for 80 percent of the companys customers "the charges will be reduced or cost-neutral."

In another move, Microsoft last week said it was offering a federated model that would let its Passport digital wallet service interoperate with other user verification technologies.

Microsoft compared its move to open Passport to the union that today allows bank and credit card holders to use almost any automated teller machine to access accounts and get cash. According to Microsoft, the tie that will bind the disparate authentication systems in this instance will be the Kerberos 5.0 network security standard, which will allow different systems to recognize one another.

"What theyre doing is fast-tracking, using their size and market power, the standards process for Passport, [to create] an authentication system for e-commerce," said Rob Enderle, a Giga Information Group research fellow.

Passport sits at the heart of the software makers ambitions to turn its vision of a digital economy interconnected through Windows-based Web services into a reality.

Still clouding the companys ambitions, however, are questions about what punishments a federal court could impose on new Microsoft products and services as part of the antitrust case against the company. But since prosecutors last week asked that the penalty hearing against the software giant not begin until February, a final decision could come too late to have a broad impact on new products and services now being launched, experts said. A hearing in the case is scheduled for Friday, Sept. 28.