Microsoft makes it legal to rent Windows, Office worldwide

Microsoft makes it legal to rent Windows, Office worldwide

Summary: For the past few years, Microsoft has been conducting experiments in various countries as to how and whether "renting" software could become a viable business model. The answer seemingly must have been yes, since Microsoft quietly added rental SKUs, as of January 1, to the list of license types available to customers worldwide.

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For the past few years, Microsoft has been conducting experiments in various countries as to how and whether "renting" software could become a viable business model. The answer seemingly must have been yes, since Microsoft quietly added rental SKUs, as of January 1, to the list of license types available to customers worldwide.

Though some industry watchers consider Microsoft's various annuity licensing options -- like Software Assurance, via which users pay for the right to use Windows, Office, and other Microsoft products, in chunks over a period of three years -- to be "rental" programs, they technically aren't. Under the newly introduced rental program, a customer would pay a flat fee to use Windows or Office 2007 (Standard or Professional versions) for a year.

The new rental rights specifics are explained further on Microsoft's Partner site:

"Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party. As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafés, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements.

"Rental Rights are a simple way for organizations to get a waiver of these licensing restrictions through a one-time license transaction valid for the term of the underlying software license or life of the PC."

According to the partner site, the new rental rights SKUs are now on the Microsoft Product List for volume licensees. The additive licenses are available to those with Microsoft Open licenses, Microsoft Select/Select Plus and government licenses. In other words, a customer must buy stand-alone licenses of Windows and Office in order to "rent" the software. The new license modifies the licensing terms, rather than replacing the underlying Windows and Office copies. The new license also bans the rental of virtual machines running Windows or Office, according to Microsoft's Partner site.

Directions on Microsoft analyst Paul DeGroot said he considered the worldwide availability of licensing rights to be a big deal.

"Microsoft has not allowed customers to rent software on their computers (it is forbidden in the End User License Agreement), but they began experimenting with this in some high-piracy, low-income markets last year. Suddenly on January 1, the geographic restrictions are gone, and rental prices are on the US price list," he said.

The new rental option "could give a boost to Internet cafes, companies renting rather than buying computers, etc.," DeGroot said. "It also could be good for seasonal businesses who could rent additional PCs for a short time, then send them back."

To attract interest in the new rental program, Microsoft is offering a promotion (through the end of June 2010), via which a rental version of Office Professional is available for $58 (regularly $83 via volume discount pricing). Office Standard (rental) is available for $45 per copy (as opposed to $64 per copy regularly.) Windows is available for $23 per copy (as opposed to $32 per copy), DeGroot noted.

"Those sound quite attractive, considering they are one-time (not annual) prices, and rental outfits can spread the cost across a lot of customers," DeGroot said. "Prices may also be different in other geographies."

DeGroot said the new licensing offer could be another way for Microsoft to try to convince users of older and illegal versions of its software to upgrade.

Making software available under a rental license "suggests that Microsoft sees this as something that small companies or -- who knows, even big ones -- would want to do. It's also another way to try to reduce the drag from 'good enough,' particularly for Office, since you can't rent licenses for earlier versions of Office (even though customers under volume license agreements can still purchase older versions, as far back as Windows XP)." It's worth noting that in emerging markets and some outfits with Internet cafes and kiosks, the older versions may be the only ones that will run on older hardware in use, DeGroot noted.

The new rental program also is another way Microsoft is trying to reduce piracy, DeGroot said.

"To use the rental license, you must have a licensed, Pro version. This is a bit quaint -- pirates in the third world have been renting any version of Windows and any version of Office for years, and the cost of legal Windows Pro licenses as well as even more costly Office licenses that you need to buy before you can even buy the rental license add-ons will put the shop using legal licenses at a severe price disadvantage to the shop renting pirated versions, but hope springs eternal...."

Microsoft has been testing Office rental programs for more than two years. The company has been testing an Office "pay-as-you-go" rental program for a pre-paid version of Office Professional in India, Indonesia, Bulgaria, Lithuania and Egypt, South Africa and Romania.

In related news, some Microsoft volume licensees still seem to be having problems accessing Microsoft's newly redesigned Volume Licensing Service Center. (The Register reported VLSC access problems back in December, 2009.)  On January 11, Microsoft officials publicly acknowledged and apologized for the problem via the company's SMB Community blog, attributing the difficulties to a new registration system. Microsoft is advising those who are still having access problems to try a list of informational Web sites (supplied in the aforementioned blog post) or contact the company directly.

Update: As reader "Rich From Bechtle" noted in the comments, the VLSC access problems aren't over yet for a number of Microsoft users. His blog post on the matter contains plenty of complaints from Microsoft customers who were stymied by the VLSC problems throughout the holidays and beyond.

Topics: Operating Systems, Collaboration, Microsoft, Software, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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103 comments
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  • complicated and expensive

    Foss is simple and free.
    Linux Geek
    • It's supposed to be complicated, expensive, and more importantly...

      It's supposed to be complicated, expensive, and more importantly, filled
      with "gotchas" to ensure people overpay for the product. Just ask Steve
      Ballmer.
      olePigeon
      • RE: Microsoft makes it legal to rent Windows, Office worldwide

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        gorians
    • Except it doesn't work 1/10th as good.

      You get what you pay for, as they say...
      Qbt
      • It always worked fine...

        for me and many of my business clients.The only real issue I've had was conversion of xls files which is the only reason I keep excel running in crossover. This "rental" deal is nothing more than a scam. You already rent MS software (check your EULA). It's used on their terms, not yours. Only difference here is a kill switch after a years is up.
        Dave32265
        • If your quality bar is very low, then YES, it "works" fine. [nt]

          .
          Qbt
          • Care to elaborate...

            rather than make general statements like that? Haave you ever even used OO? My guess would be no.
            Dave32265
          • Uh, yes I have, so that is why I can say that.

            The point YOU are avoiding though is why do businesses still overwhelmingly choose proprietary software, when OSS is supposed to so wonderful?

            Hmmm...?
            Qbt
          • You still avoid the question...

            I have Real Estate companies, print shops, Doctors offices etc using OO and they are perfectly fine with it. What makes it suck? The fact it's not an MS product?
            Dave32265
          • @ Dave

            [i]I have Real Estate companies, print shops, Doctors offices etc using OO and they are perfectly fine with it. What makes it suck? The fact it's not an MS product?[/i]

            OK, let me see if I can make this clear. The part between the angle brackets is the answer:

            [b]>>>>[/b]Because businesses evaluate software and overwhelmingly choose to pay for quality software rather than go with the [i]free[/i] "alternatives"[b]<<<<<[/b]

            So once again, for the question that you claim I am avoiding to answer, the answer is within the ">> <<" brackets.

            I would have drawn you a picture if ZDNet supported that functionality, but they don't. Instead I will have to rely on your reading skills. Make us all proud!!!
            Qbt
          • @Qbt

            Ok so all you told me was a whole lot of nothing Just because you jump off a bridge doesn't mean I'm going to follow lockstep and jump too. I got a much more comprehensive answer from someone who knows what they are talking about(mswift & mrjoctave) and even some new insight into the rental matter. And yeah maybe OO does suck for business' that need something that it doesn't offer, but for the rest, if it does what what's needed then it doesn't suck and your opinion is just that, your opinion but thanks for playing.
            Dave32265
          • My my, Qbt, I am so impressed

            as I am sure every other ZDNet reader is.

            Who else could have figured out what ALL businesses everywhere always do, their motives for doing it, and consolidate the results in a single sentence?

            I stand in awe, my hat's off to you!
            Ole Man
          • @QBT

            OO is not for retards, so please stay with MSO.

            ;)
            SpikeyMike
          • If your quality bar is very low???

            Of course you can defend your assertion with the trivial observation that quality is in the eyes of the beholder. But it's curious what it is you would contend "low" quality, with virtually interchangeable rendering and file interchange. It may be that you prefer a particular toolbar layout, but mainly you avoid the question.

            You simply throw out a non sequitur, then leave it lay. Even Tommy Smothers could occasionally do better than "Oh, yeah?"
            IT_User
        • Yes it does....

          and i always recommend it to those that are looking for a cheaper alternative, however, collaboration is an area where OO's potential is not to hot, mind you that's not because of quality/functionality, but the same old adage, MS Office dominance.... unless OO users will be able to collaborate (shared work-spaces comes to mind) with MS Office users.

          In regards to rentals being a scam:

          "This "rental" deal is nothing more than a scam. You already rent MS software (check your EULA). It's used on their terms, not yours. Only difference here is a kill switch after a years is up."

          i think that's a little short sighted, rental tends to involve repetitive payments and the return of said goods at the end of rental terms. This is not the case with Office or Windows Licensing, Secondly, this move opens up a niche market (PC Rental) that has effectively been operating illegal, this decision potentially opens up that market to a wider audience and an abundance of opportunities.... and could even increase competition in key area's of technology.

          PC Rental companies could offer supporting services with there rentals where it's not feasible for a company/establishment to have an in-house IT Team, such as a School [EDITED] or College, also the fact that it would probably be CHEAPER for Schools and Colleges (and other establishments and small businesses) to rent there systems instead of purchasing and maintaining such.[END of EDIT]

          Just a thought!
          mrjoctave@...
          • Operating Illegally

            They are only operating illegally because Microsoft crafted their license just so. By disallowing the renting of it's OS and related software (something I'm sure was in the EULA long before Linux took off), they [i]created[/i] the issue of "illegal" rentals where non existed before.

            PC Rental companies and especially Internet cafe's should move (and should have moved long ago) to something that doesn't have that restriction.
            AlexNagy
          • Revenue Protection

            "They are only operating illegally because Microsoft crafted their license just so."

            Yes, its called revenue protection, if they allowed the rental of said OS then they would have lost a lot of potential buyers to the cheaper alternative of renting.... is this wrong???

            "By disallowing the renting of it's OS and related software (something I'm sure was in the EULA long before Linux took off), they created the issue of "illegal" rentals where non existed before."

            yes, in the interest of REVENUE PROTECTION.
            mrjoctave@...
          • Yeah, a .44Mag is good REVENUE PROTECTION, too

            And it's perfectly legal if the "user" has a "license".

            But you don't see too many people running around with one. Not even Brinks or Wells Fargo with the advent of digital currency.

            Now Clint Eastwood, he's the character you want to protect your revenue.
            Ole Man
          • If you've got something interesting to say...

            i'd be glad to hear it, but then again, you can't even get your equations right, so on second thoughts.... never mind.
            mrjoctave@...
          • That wasn't a question

            but I didn't expect you to know that.

            You never disappoint me.
            Ole Man