At my son's college orientation last week, we heard from the college's IT staff that students could purchase Office 2010 this summer for $9. Windows 7 Ultimate? $9 ($7 if we want to cheap out and pick up a mere 32-bit version). That's a little better than the $499 consumers have to pay for full-blown Office 2010 or the $320 they pay for a boxed version of Windows 7, isn't it? Of course, it's also better than the advertised academic prices for the same software, or the "special deals" schools can get through the right resellers. So what gives?
It all comes down to Microsoft's varied and often confusing licensing models for all of their software, the academic versions of which can be had through even more varied layers of discounts and purchases. I had a chance to talk with Anthony Salcito, Microsoft's Vice President of WorldWide Education, last week to discuss the various ways to obtain Microsoft software and try to make a bit of sense out our options.
Now before you start telling me to just go open source and leave all of the Microsoft licensing behind, let me say that this guide is directed at those who are vested in and/or, for whatever reason, have decided to continue supporting and using Microsoft products. Microsoft remains the dominant software vendor and platform worldwide in schools and businesses. While those same schools can no doubt find success with other platforms and solutions, it's as easy (if not easier) to make a case to "Go Microsoft" as it to to "Go Google" (or "Go Linux" or "Go Whatever").
So now the disclaimer is out of the way - what about the licenses? »
As Mr. Salcito put it, the licensing complexity is the result of Microsoft's attempt to balance flexibility to meet unique needs with cost savings for customers. As a result, licensing of all Microsoft software (from Client Access Licenses for users hitting a server to Windows 7 installs) can be divided into two major types: perpetual and subscription.
Perpetual licenses, as their name suggests, confer ownership of software to buyers. So for those of you still running Windows XP that you installed on your Windows 2000 machines, hopefully you have a perpetual license for all of the OS installs. Within perpetual licensing (also called "transactional licensing" in Microsoft-speak), you can buy Open or Select licenses. Both operate similarly, but Select licenses tend to be cheaper since they are purchased in greater volumes. Podunk High School gets to buy Open licenses; Seattle Public Schools buy Select licenses.
Interestingly, though, many small schools can now leverage Select license pricing through partner vendors, collaboratives, and consortia. CDW-G, for example, can offer a nominal number of licenses for a given product to a small school at so-called D-Level prices (A-Level prices are for small organizations, while D-Level prices are available to the largest volume customers) in many markets because it works with cooperatives to buy and resell very large numbers of licenses.
Microsoft's partners can also provide deeper discounts based on anticipated need for software. For example, if a university needed to purchase 15 SQL Sever licenses at the beginning of the year, but knew it would be rolling out another 50 servers over the year, they could purchase 15 Open/Select licenses at the volume price for 65 licenses.
Perpetual licenses are also usually included when schools purchase new equipment, whether desktop, server, or otherwise. These are generally available at very aggressive prices because of deep academic discounts that Microsoft provides to Tier-one OEMs. Thus, if you are purchasing a new server (or 10), it usually makes sense to purchase your CALs and other software licenses directly from the OEM with the hardware.
So what about those subscription licenses? »
In a subscription licensing model, an organization essentially rents access to software. In the educational space, this actually has a lot of advantages. In particular, license management becomes much easier. If you have a lab of 30 computers and need to add another lab of 30 computers, you needn't do anything with your licensing; at the end of the year, you simply submit your new total number of licenses and you're billed appropriately without any pro-rating or retroactivity.
Subscription models include School Agreements for K12 schools and districts and Campus Agreements for higher education. In both cases, students can also gain access to the software for home use at extremely low costs (e.g., my son being able to purchase Office 2010 at his university for $9). This student access terminates when a student ends his/her association with a school, but for as long as the agreement is in place and a student is enrolled, they can use the software essentially for free.
As with hardware leases, in a subscription model, the costs are spread over time. This way, schools can buy and deploy more licenses than they might be able to afford with perpetual licensing by paying over a number of years. They also have access to upgrade and downgrade rights over those years, helping address issues of obsolescence and/or legacy hardware and software.
Mr. Salcito also noted that, in addition to their paid licensing models, schools could access Live@Edu, their Exchange/SharePoint Live-based email and collaborative platform, for free. Schools also gain access to the MSDN Academic Alliance, a large and free/low-cost community and source of professional application development software.
Like I said, this isn't a pitch for Microsoft. However, Microsoft products can be deployed for costs ranging from free to relatively reasonable for schools that can choose the right licensing agreements and work with the right partners to identify the most cost-effective licensing schemes. These costs make choices between FOSS and Microsoft platforms a bit less about the money and much more about the needs and requirements of an organization.