Microsoft tunes SMB licensing

Microsoft is streamlining its licensing and financing programs to simplify for midsized businesses the acquisition and maintenance of its software in North America and around the globe.

The company is consolidating variants of its Open Value licensing program , which is targeted at midsized companies, into a single program that is scheduled to be available in October. Microsoft says the changes also will help its resellers better serve midsized companies.

The changes, designed to make it easier for users to acquire, track and upgrade software, are part of Microsoft's plan to target specific products and programs at midsized businesses - a market it has largely ignored but is now targeted by rivals such as IBM. The program will include Microsoft's Software Assurance (SA), a maintenance program to keep software up to date. In addition, Microsoft plans on Sept. 15 to announce improvements to SA. While it did not give details, company officials say the improvements would be similar to some of the other 14 SA benefits, such as home-use rights, that Microsoft has added over the past 18 months.

Also, Microsoft is renaming its financing program Microsoft Financing. The program was called Microsoft Capital and grew out of Microsoft's entry into the business application market.

"The Open Value agreement is like a baby enterprise agreement" says Alvin Park, an analyst with Gartner. Microsoft's Enterprise Agreement is a licensing program for companies with 250 or more PCs.

Microsoft officials say many midsized businesses didn't qualify but were also too large for the small-business software and programs Microsoft offers, which leaves midsized companies in a no man's land.

"The open value piece is for those organizations that want to enter into some kind of company-wide commitment. They want to commit all their PCs to run a certain version of Microsoft software," Park says.

Most of the changes have already been started in North America over the past months, but in other areas Open Value licensing had morphed into several variants, such as multi-year open and open subscription licensing.

With the single program users should be able to more easily track licenses because they will be acquired through the Open Value program only and not a combination of retail, OEM and licensing programs. Users also will be sent the disks to install the software instead of having to order them through a separate transaction.

The Open Value program also should streamline the upgrade cycle for users because they will have access to software upgrades through SA. Microsoft says users will be able to smooth out costs with an annual payment plan for the three-year Open Value licenses.

"Users will be buying in volume rather than piecemeal ad hoc, which should control costs," says Sunny Charlebois, product manager in Microsoft's worldwide licensing and product group.