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Microsoft's new licensing may not fly

Microsoft's new Select Plus licensing scheme is an intriguing modification to an increasingly problematic arrangement: the exchange of large amounts of enterprise money for the right to use software you've been paying for for years.Setting a licensing scheme is like flying a plane.
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Written by Rupert Goodwins on

Microsoft's new Select Plus licensing scheme is an intriguing modification to an increasingly problematic arrangement: the exchange of large amounts of enterprise money for the right to use software you've been paying for for years.

Setting a licensing scheme is like flying a plane. Too low a price for a fixed volume – Windows has saturated the market – and you lose money without gaining anything. That's like reducing your airspeed to a dangerously low level. Too high a price, and you drive users away: although Windows has a near-monopoly on the enterprise desktop, the environment around it is evolving rapidly and there are many more options this year than last. That's where your wings drop off.

Microsoft's great worry must be what pilots call coffin corner – a particular combination of speed and altitude where you can't speed up or slow down without dropping out of the sky. Too fast, and turbulence disrupts airflow over the wings, causing a catastrophic loss of lift. The nose goes down, control surfaces stop working and you're faced with an engaging set of problems. Too slow, and you stall: nose goes up, tail goes down, control surfaces stop working and you slide bottom-first towards the ground. Again, you're likely to spill your in-flight refreshment without having to worry about the dry cleaning bill afterwards.

So it is with Windows licensing. The one question Microsoft doesn't want anyone asking is “What are we getting for our money?”. The company is quite open about this – the Select Plus deal is designed around what's known as inertia marketing: sign someone up for a repeating deal and then hope they forget about it. It works in publishing and telecoms; why not for enterprise licensing? Microsoft even list this as a user benefit - “Perpetual agreement. Keep renewals at the IT budget level rather than the boardroom level.”

Inertia marketing rarely benefits the customer, and this is no exception. Microsoft benefits by having a constant fixed income that's high enough to keep the company in Xbox development funds but low enough that nobody spending the money will ask questions. The enterprise IT department's job in all this, thinks Microsoft, is to conspire in not rocking the boat. In cash-strapped times, this is not how any enterprise IT head is likely to think.

Don't take Microsoft's word for it. Plug the Select Plus into your spreadsheets and run through a few years – then ask whether you're getting the best deal in exchange for that bottom line. Then try some other numbers for some other ways of working, and see how happy you are to keep the Redmond Express in the air. A little turbulence may be good for their souls.

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