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Read the fine print in Microsoft's new application platform license

Microsoft (unsurprisingly) isn't touting the fact, but its newest licensing agreement could leave customers product-less if they don't renew it. As of October 1, Microsoft will offer customers with its Application Platform Agreement license the right to buy software covered in the contract. But even with that new clause, is the APA a good deal?
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft (unsurprisingly) doesn't tout the fact, but its newest licensing agreement could leave enterprise customers product-less if they don't renew it.

As of October 1, Microsoft will offer customers with its Application Platform Agreement (APA) license the right to buy software covered in the contract. But even with that new clause, is the APA a good deal?

Microsoft APA -- an “all you can eat” license for Microsoft’s server products -- was a big topic at Microsoft's Worldwide Partner Conference show for its reseller partners this week. The APA license is focused on products that Microsoft considers part of its “application platform," including SQL Server, BizTalk Server, SharePoint Server, Visual Studio and the Dynamics xRM "everything relationship management" business software.

In many ways, the APA is like Microsoft's Software Assurance (SA) add-on to its volume-license agreements. Except for one, as one reader told me recently:

"There is an important difference between the APA licenses and the 'old' ones that Microsoft doesn't tell you and that is that when the APA  license runs out you don't own the products. Normally if you decide to not have a SA license anymore you still own the products.

"When the SA ends, you own perpetual rights to the most recent version that was released during the SA coverage. But when APA ends, you don't get any perpetual rights (unless bought separately or somehow negotiated in)," Microsoft licensing expert and Senior Vice President of  Distributed Desktop Services at NET(net), Inc. Scott Braden confirmed.

When contacted about the APA particulars, Microsoft officials acknowledged the current limitation of the APA license. A spokesperson told me the following via e-mail:

"Today, under the former Application Platform Agreement (APA), new software licenses that are added during the agreement term need to be purchased at the end of the agreement or need to be de-installed.... If the customer has Microsoft Software Assurance (SA) when they purchase Microsoft Application Platform (App Plat), they keep the rights to the latest version of the software licenses.If a customer doesn’t have SA at the time they decide to purchase App Plat, then they need to purchase the software licenses to retain the latest version.If a customer opts not to purchase the software licenses at renewal, then the software licenses revert to the original version they purchased."

Starting October 1, however, Microsoft is planning to add a new option to the APA to allow customers to buy products they licensed under APA. That new volume-licensing option is called the Enrollment for Application Platform.

"Based on customer feedback, Microsoft [will be] offering customers the option to purchase licenses for new deployments which they will have rights to at the end of the new Enrollment for Application Platform under the Enterprise Agreement," the spokesperson confirmed.

At the partner conference this week, Microsoft is playing up the benefits of selling customers the APA license. Microsoft officials told partners in one session that the APA will help them get them larger Enterprise Agreement volume-license renewals. Microsoft is suggesting partners try to sell APAs as part of their "Oracle Compete" mission, emphasizing the "fixed upfront license costs (via APAs) for competitive migrations."

Microsoft is highlighting pricing as a custsomer benefit of the APA.

"The Microsoft Application Platform is designed for customers that want to standardize on the products in the suite and build applications to get to market faster," the spokesperson said. Micosoft is "offering up to 40 percent savings if customers decide to purchase the software license upfront in the 1-year model or at the end of the 3-year term."

The APA license is a pure rental deal as it stands now. It gets a little more flexible in October with the new option to buy licensed software. But I'm still wondering whether the gotchas of the license will outweigh any kind of cost savings that customers might accrue by going the APA route. Anyone have any direct experience with the APA license?

Update: More on what is in the APA and the coming changes can be found on Richard Gibbons' "Rich from Bechtle" blog.

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