Microsoft Simplifies Its Volume
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.
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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.
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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.
Helping Customers Find Price
Given that there are currently more than 8 million price points worldwide, the Worldwide Licensing and Partner group is also working to help customers more easily find the product price information they need.
In October, the number of price points and SKUs will be reduced for each of the programs, with individual language SKUs with the same pricing all being referred to by a single term: Single Language. So, for example, SQL Server English will now read SQL Server Single Language.
These moves will reduce the number of Select price points by 51 percent and the number of SKUs by 72 percent; the number of Open Value price points will fall by 50 percent and the SKUs by 51 percent; while the number of Open License price points will drop by more than 32 percent and the number of SKUs by 33 percent.
But no prices will change as a result of the pricing updates, which are designed to “help customers and partners more easily find product price information with the reduced number of price points and SKUs per Volume Licensing program,” Sloane said.
Microsoft is also introducing a new Volume Licensing Service Center, which will provide online solutions for volume licensing customers looking to more easily manage their agreements and products.
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They will also be able to download the software available under their volume agreements, request product keys, and view a comprehensive license summary across their programs and agreements.
The first phase of this service center, which started running the week of Sept. 3, is a user interface that helps make the data on the Volume Licensing site more manageable.
“Over the next 18 to 24 months, we will continue to make improvements to the database and user interface so customers can better manage their assets,” Sloane said. “This initial version provides customers with access to their Microsoft license statement, an improved product downloads experience, enhancements to the product key retrieval process and localization into 24 languages.”
The new service center does not replace any existing resources, but rather provides a single location for Volume Licensing customers to easily access and manage their licensing agreements and products.
“Historically, customers would have to go to multiple locations to find and download software available under their volume license entitlements, to view and request volume licensing product keys, and calculate current Microsoft license statements to get an easy-to-understand, comprehensive license summary across programs and agreements,” she said.
“Our vision is to consolidate the Microsoft Volume Licensing Services and the eOpen sites for Open, Open Value, Select and Enterprise Agreement customers, under this center,” Sloane said.
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Microsoft also plans to reduce the number of software products it ships on CD to all its customers globally by shipping only the most widely used software products on disk. These fulfillment changes went into effect on Sept. 1 for its Enterprise Agreement and Select License customers.
Products that will continue to be shipped to customers on disk include Microsoft Exchange Server, Operations Manager Server, the 2007 Microsoft Office system, Office SharePoint Server, Office Project, SQL Server, Systems Management Server Enterprise Edition, Office Visio, Visual Studio, Windows Server and Windows Vista.
The rest will be made available for electronic download from the Volume Licensing Services Web site.
“The software that will only be available via download includes stand-alone copies of Office products such as Access and InfoPath, or Excel for Mac, and some of the more specialized servers such as Speech Server,” Sloane said.
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