Can Microsoft’s complicated software licensing policies survive?

Moderated by Jason Hiner | March 25, 2013 -- 07:00 GMT (00:00 PDT)

Summary: Matt Baxter Reynolds and Ken Hess debate the future prospects of Microsoft's approach to volume licensing.

Matt Baxter-Reynolds

Matt Baxter-Reynolds




Ken Hess

Ken Hess

Best Argument: No


Audience Favored: No (83%)

Closing Statements

Licensing regime will survive

Matt Baxter-Reynolds

For me, Microsoft's licensing regime will survive for as long as there are people deploying complex, on-premises enterprise systems. A per user/per month subscription model does not work well enough in that scenario. Both the vendor and vendee need the flexibility that comes from complexity. If you need to push through a multimillion dollar deal, you need something more nuanced than just "multiple the number of users you have by 'x'".

Over time I think we'll see more SaaS-type deployments sold on a subscription basis, but this has more to do with outsourcing compute power and maintenance to the cloud rather than any inherent benefit in subscription licensing.

Of course, SaaS has an ancillary benefit of making sure that users have the latest and greatest -- i.e. the most well-patched, most secure and safest. That's a good thing for everyone.

Licensing reform is overdue

Ken Hess

Microsoft's licensing schema is far too complex for most companies to manage. Microsoft has an estimated 500 to 1,000 employees who work in product licensing. That points to a system that requires far too much overhead to maintain. It's inefficient for Microsoft and it's near impossible for businesses to comply with the convoluted licensing for operating systems, servers and applications.

The Office 2013 backlash that Jason referred to in the debate is an example of how the Microsoft licensing plan begs for reform. In fact, once Microsoft recovers from the Office 2013 licensing change and the launch of Office 365, I'm hoping that they launch the Great Licensing Reform of 2014.

SaaS-style applications such as Office 365 should help resolve licensing issues for Microsoft's customers. A subscription pay-as-you-use model is good for customers and for Microsoft alike. Customers will benefit from being untethered to a single computing device. Additionally, the upfront cost to businesses will be easier to manage. Instead of spending a huge lump of cash for software licenses, businesses can ease into a payment plan of sorts with predictable recurring subscription costs.

For Microsoft, a reformed licensing model creates a more honest customer count and, in turn, would generate more revenue for Microsoft because this type of software use would be impossible to pirate. The SaaS and subscription models work for other businesses such as, Google and VMware. It's a proven system. Customers like it and so do vendors. License management for both parties is simple.

Change isn't easy but it's time that Microsoft follows this trend that has almost left them behind.


Jason Hiner

This is almost one of those "wrong side of history" issues. As Matt pointed out, there are some advantages to the traditional software licensing model that is Microsoft's bread-and-butter -- namely "budgetary control and flexibility" (if you know how to navigate it correctly).

However, as Ken said, even among companies that live or die on traditional licensing, Microsoft has an inordinately complex set of options for businesses to sort out. And, beyond that, the subscription licensing model offered by SaaS providers -- Microsoft's biggest competition -- solves other problems as well. The biggest one is being able to access applications from any devices -- work machine, home machine, tablet, smartphone, Internet cafe, etc. The other big issue is software updates, upgrades, and rollouts.

As a result, I'll rule with the crowd on this one. Microsoft's current licensing policies are completely unsustainable.



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  • Licenses, yes. The question is one of enforcement

    I think that it would certainly be in Microsoft's best interest to greatly simplify licensing for their software, and subsequently enforce it. Microsoft can certainly continue their largely-unenforced, overly-convoluted licensing policy and continue to attempt to make it stick. We we in many software companies that among the last legs of their existence is the conversion of the R&D department to the legal department. I wouldn't be surprised to see Microsoft head down that road.

    Conversely, Microsoft's attempt to transform software sales into software subscriptions may also come into play here, though that will largely hinge upon their success.

    Thus, my vote is "yes, it CAN survive, but it's not in Microsoft's best interest to do attempt to do so". A well-asked question begets an answer. A poorly asked question begets a question.
    Reply Vote I'm for Yes
  • I am saying no

    Microsoft continues to make fumbles in licensing. They have great software, but they are not evolving with the times. For instance, SKUs. I think every single product needs to be a single SKU. Windows Server, Windows Client, Office, Lync, Visual Studio, Exchange, SharePoint, SCCM, etc. That takes away a huge portion of the complexity in licensing already.

    Next option:
    License each product at a reasonable price. Remove OEM restrictions.

    Windows $100
    Office $200

    I think products such as Exchange and SharePoint really should be services you subscribe to as needed.

    As for volume licensing, just buy what you need without signing up for a contract or any tie ins like Software Assurance.

    If I want 5,000 Windows licenses and a single retail license cost $100, cut that in half. Think of it as a damn privilege a customer still wants to use so much of your OS. If the customer experiences difficulties and can't afford the 5,000 license, be nice and say, don't worry, take as much as you need for uses.

    Cut out the BS with transfer rights. If I want transfer uckin' software to the moon, let me have that right.
    Reply 3 Votes I'm for No
  • Complicated licensing only irritates those trying to be honest

    and truth be told, Open Office is catching up fast.
    Reply 3 Votes I'm for No
    • No not really.

      Its still stuck in the Office 95 paradigm. In fact, OpenOffice is far behind it will remain a niche option for persons who either don't know about Microsoft Office (which rare, but it does happen) or is staunch set against it like the average Linux user. Its a very inflexible suite to use, not to mention slow. I use Word daily and its such wonder how powerful it is. For instance, I emailed a set of photos inserted in a Word doc and emailed it to someone who needed them. The person replied saying they only needed 3 pics out of the doc. I just right clicked and save picture of the three requested and emailed them. (This functionality is not even in Office 2007. But it shows the power of Office in just the little things.
      Reply 4 Votes I'm Undecided
      • People like you scare me.

        Word is a poor page layout application. It fails at the most basic layout tasks and often ignores basic formatting. That's if it doesn't corrupt things when you get complex "layouts".

        Using it as a storage mechanism for transmitting pictures is equally appalling. Better to just send them the JPEG's than kill them in a Word Doc.

        I cringe when people try to use Word as a layout program and want help. Word truly is a horrible app.
        Reply 4 Votes I'm Undecided
        • Word is bloated garbage

          Absolutely correct! My wife recently took a college class for Word 2010, she thought it would be an easy credit... WRONG! The text book attempted to show the student, step-by-step, how to create layouts and where all the little hidden features were to make text flow correctly on the page. The problem is that half the options shown in the screen shots had been moved by Microsoft in an update, or no longer worked as described in the text book! In the end, by trial and error, she would mess with settings until she could get the result shown in the text book...

          Once the class was done, she wanted Word OFF HER COMPUTER and went back to LibreOffice. She said, and I quote, "Word is stupid! Most things are hidden all over the place! I did learn something about page layout, but it's so much easier to do the same stuff in LibreOffice!"

          While it is just her experience, I personally agree, and I think most people are seeing the light these days.
          Technical John
          Reply 2 Votes I'm Undecided
          • If you feel that way, then why do you use it?

            Word is far more powerful (and thus more complicated) than most people need.

            Certainly, there are plenty of free or nearly free alternatives which are compatible with Word, and there are other alternatives which are not compatible but still meet most people's needs. I am sorry that your wife was surprised to find out how complicated (powerful) Word is but if it were easy to use, one would not need a class to learn how to use it.
            M Wagner
            Reply 1 Vote I'm Undecided
        • Actually, Word has some pretty good layout options

          The new guides in Word 2013 work very well; older versions don't have as many features so to make this relevant to licensing I'll point out that SA and EA and VL licences give you rights to get new versions of software without extra payments - if that's not what you want, you can choose a different licence. Complexity is an unavoidable element of choice.
          Reply 1 Vote I'm Undecided
        • The issue isn't with Word itself...

          The issue is misuse of Word. It is a word processing tool that can do side duty as a light weight page layout tool...for people who don't have anything else. The problem is that people tend to use what they have. Its the old saying "if the only tool you have in your bag is a hammer, then everything starts to look like a nail".

          We see the same thing all the time with Access and Excel as well where people try to do things with them for which they just are not well suited just because they don't know any better. There is nothing wrong with those programs when used within their intended purposes.

          I think that those of you arguing the merits of things like Libra Office etc, just don't get this. The word processor in other packages still has its pros and cons Vs Word and it is still a word processor - not a full blown desktop publishing tool. So over using those other products is equally problematic.

          Speaking of other products though, since the topic is licensing, cost and licensing issues are the the main reason for using an alternative product - not because one product is inherently better than another.

          But, the recommendation I give to most people is that its easiest to use the same products at home that you do at work so you don't have to learn both. Most companies that use MS Office will be on Volume License agreements with Microsoft that allow "Home Use" which basically allows employees to download a license key for $10.00. So if you use it at work it is nearly free to use at home too...and yes that is yet another "complication" added to the mix. Students can usually buy through school at cut rate "academic" licensing prices. More complication. Most computers these days seem to come from places like Best Buy or Dell with a "starter" version that is plenty for most home users. More complication and yes more different versions.

          But the complications and different versions also mean choice. If you don't like the idea of choice, go buy a Mac (sorry had to slip that one in there) With choice comes a certain amount of need to be a knowledgeable buyer to find the best deal for you or your company. It also means that there are probably not all that many people out there buying a shrink wrapped full version of Office with their own money.
          Reply 1 Vote I'm Undecided
      • Hahaha

        You're emailing photos inserted in a Word doc?
        I believe it is YOU who is stuck in an old paradigm!
        Reply 6 Votes I'm Undecided