Microsoft software licensing changes: What they mean for your business

Software Assurance will be a big factor in negotiating new contracts

Changes to Microsoft's software pricing and licensing could have a big impact on IT departments. This is according to analysts at Forrester Research, who have identified five changes that could affect CIOs who are planning new purchases or simply trying to comply with their existing contracts.

Forrester's Five New Microsoft Licensing Twists That Every IT Buyer Should Know report said that while most of the changes are positive for customers, they've also created question marks around the value of upgrades and have complicated licensing decisions. To find out what you need to be aware of when embarking on licence negotiations with Microsoft, see below.

Microsoft Office 2010 price increase

With the price for Microsoft Office 2010 increasing compared to Office 2007, Forrester says organisations will need to think carefully about whether to purchase Software Assurance for Office as part of any new licence agreement with Microsoft.

Software Assurance is a service package companies can buy alongside licence agreements which provides additional upgrade rights and deployment services for the technology it's attached to.

Companies already on Software Assurance for Office will get the new version at no extra cost as part of their existing subscription.

Organisations running Office 2007 without Software Assurance will be able to upgrade at an additional cost but for those running earlier versions of Office there is no upgrade option, meaning they will have to start new licence agreements if they want to use Office 2010.

For businesses thinking about adding Software Assurance to any licence agreement for Office 2010, Forrester questions the value of the upgrade rights, especially as businesses don't know if there will be any features on the next version of Office that they'll find useful.

An example of how features can change is the scrapping of the Enterprise and Small Business editions for Office 2010 with features from these versions moving to the Standard and Professional Plus versions.

Customers with Software Assurance for the previous versions of Standard and Professional Plus receive these additional features - such as OneNote and Office Web Apps - at no extra cost when they upgrade to Office 2010. However those currently running the versions of Office being phased out will have to pay extra to upgrade to the new versions to retain that functionality whether or not they have Software Assurance on those products.

Forrester admits some companies may benefit from adding Software Assurance to new agreements for internal budgeting reasons or to provide access to Roaming Use Rights, which allow users to access the version of Microsoft Office running on their work PC via a range of external devices.

Forrester advises companies to carefully consider whether they need Software Assurance when setting up new licence agreements. If they decide they need Software Assurance software buyers should work with Microsoft to negotiate a price to a level where it makes financial sense.

Using Microsoft Office outside the office

The next potential area of confusion is a set of new licensing options for accessing virtual versions of Office via devices other than the user's work PC.

Microsoft recently clarified these policies by saying every primary user of a PC will receive rights to use Office Web Apps with Office 2010 from 1 July 2010.

However this change only covers versions of Office Web Apps hosted by the businesses themselves using Microsoft's SharePoint Foundation Server or SharePoint Server 2010. This is because there isn't a business licence for versions of Office Web Apps hosted by Microsoft itself...