New Microsoft program to make volume licenses 'evergreen'

New Microsoft program to make volume licenses 'evergreen'

Summary: Microsoft took the wraps off a new licensing program -- Select Plus -- which company officials said is aimed at simplifying software and services purchases by large and mid-size businesses.

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Microsoft took the wraps off a new licensing program -- Select Plus -- which company officials said is aimed at simplifying software and services purchases by large and mid-size businesses.

Customers cannot purchase Microsoft's new Select Plus license, announced July 1, until October 1; Microsoft is announcing it this week to give customers and partners time to digest it before the company's annual Worldwide Partner Conference in Houston next week, according to company brass. (July 1 also is the first day of Microsoft's fiscal 2009, which perhaps also plays into the announcement's timing.)

Select Plus ultimately will supersede Microsoft's current Select volume-license agreement, said company officials.

"We needed to be a little more flexible about how customers buy software" and services," said Chris Blackley, a director in Microsoft's Worldwide Licesing and Pricing group. Select Plus "is the next step in our evolving business of trying to simplify licensing. It's a multi-year evolution."

Select Plus does not make any changes to licensing at the product level -- so there are no changes being introduced around cores or virtualization, for example.

But one of the biggest changes in the new licensing program is that volume-licensing contracts under Select Plus are "evergreen," with no expiration date, according to Blackley. Microsoft's marketing slogan around this change: "Keep renewals at the IT budget level rather than the boardroom level.")

Update: Frances O'Brien, an analyst with Gartner, had this to say about the no-expiration-date part of Select Plus:

"Since the agreement is now evergreen, instead of having one renewal date; companies will have multiple renewal dates. Select is already administratively burdensome compared to an EA (Enterprise Agreement). Multiple renewal dates could exacerbate that. I have not seen an update of the new Microsoft Licensing Statement which will allow clients to get a view of their software entitlements across the board so I am not sure how much that will help clients manage the multiple renewal dates."

The new program also ends the current Microsoft policy of allowing customers to pro-rate Software Assurance (SA) contracts when purchased by Select volume licensees. Under Select Plus, SA annuity-licensing contracts will last for three full years for all products for which customers purchase them. (Software Assurance is Microsoft's controversial licensing plan that allows customers to pay for their licenses over a three-year period and obtain product updates for that period of time.-

"The 36-month SA, no matter when you buy it feature is nice," said Scott Braden, Senior Vice President of Microsoft Services for NET(net) Inc. "Customers and resellers have constant headaches figuring out the 1-2-3 year pro-rata pricing that's currently in place.  However the down side is that a customer will end up with a mess of expiration dates scattered across their environment, which will be another management challenge. "

Another change introduced with the new Select Plus Program involves forecasting. Under the current Select program, customers are required to forecast their software and service purchases for three years ahead. If they fail to meet the volumes they project, they are downleveled and required to pay more (as higher volume purchases reduce per copy/per service rates customers pay). With Select Plus, however, forecasting goes away and actual purchases are used to calculate license fees, Blackley said.

Under the new program, customers' multiple volume-licensing contracts with Microsoft will be consolidated from an administration and management standpoint.

"On first blush it looks like a net benefit for clients, simply by virtue of offering another choice and model for acquiring licenses and SA," said Braden. "However as always with Microsoft licensing, the devil is in the details."

Any customers out there who currently buy Microsoft products via Select? What do you think of these new changes?

Topics: Software, CXO, Microsoft, IT Employment

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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15 comments
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  • Now

    If we can just get rid of WGA and activation process for stand-alone users, we'll be in business.
    psyntience
  • Microsoft volume licenses 'evergreen'

    ???However as always with Microsoft licensing, the devil is in the details.???

    Never were truer words spoken - you can bet the farm on the fact that an entire, large room of lawyers was in on the drafting of this.

    But in the 'hope springs eternal' dept., it would be nice if it worked as simply stated.
    chrome_slinky@...
  • Already signed up...

    My rep brought the new license agreement over and I immediately signed on the line which was dotted. I did not even bother reading it. I know if it came from Microsoft's legal department, it is a fine piece of contractual work which should not be questioned. Our own legal department questioned why I did not review it. I took a deep breath and explained to them that as a high powered CIO, I refuse to acknowledge their request and if they so much as delay this by 10 seconds, they will lose access to our Exchange 2007 servers. When one of the lawyers quipped that he can never get into Exchange now, I called the help desk and had his Active Directory account locked out.
    Mike Cox
    • Because the terms are so clear

      I was hoping that behind the NDA you were a primary consult
      for these improvements. (This new approach sounds so
      simple I am boldly raising my assessment of being a license
      wrangler from the seventh to the sixth and half circle of hell.)
      DannyO_0x98
    • Mikey NEVER disappoints...

      I'll give you an "8" on this bit of fantasy. You lose two points because the option is not even available until October.
      AttackComputerWhiz
      • Products not being available to the general public

        never stopped our Mikey before, why should it now? I mean what other company is using Windows 7 on mission critical hardware?
        Michael Kelly
  • RE: New Microsoft program to make volume licenses 'evergreen'

    Microsoft is stopping the sale of XP because they know that it is a solid good operating system and want to stick people with the stupid vist.you would think after so many years in the making it should have been better and since it is a junk microsoft rather then to admit that vista is not going any where they want to still push it by eleminating XP, they should be a shame of themself. Big bussnesses don't want vista even if is free..
    wispeedy@...
  • Hail Mary, Queen Of FUD

    About 10% of what she reports is accurate and true.
    itanalyst2@...
    • Why don't you...

      set us all straight then?
      jasonp@...
      • Straight With What?

        Most of her stories are pure speculation, and her story that she keeps telling that XP is gone after June 30 is a bold faced lie, you can still get XP from Dell and online retailers.

        She spreads FUD like I spread cheese on crackers.
        itanalyst2@...
        • Read It Properly

          She reports Microsoft have stopped supplying resellers with XP. They still have stocks of it. Large one's probably due to demand. Don't blame them either.
          Average_Joe
    • While that's not true it's 10% more than you could

      ever provide...hope your moniker is not your job - you would starve.
      ItsTheBottomLine
    • Really It anal lyst2 ???

      Having read Mary Jo's articles for over 3 years I find your comment very offensive.

      "IMO she provides more informative content relative to Microsoft then they themselves provide
      to there users. We value her blog as definitive and accurate."
      CustomComputers
    • WE DISAGREE,

      Anal lyst 2...very proper screename you have!
      CustomComputers
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