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Microsoft adds incentives to licensing program

Sep 22, 20043 mins
Enterprise ApplicationsMicrosoft

Microsoft Wednesday added a bit more sweetener to a licensing program that has been a bitter pill for users.

Microsoft Wednesday added a bit more sweetener to a licensing program that has been a bitter pill for users.

Microsoft officially made an upgrade plan called Step-Up Licensing a formal part of its Software Assurance maintenance contracts. The Step-Up program, first introduced as a one-year promotion on Sept. 1, 2003, allows users to move from standard editions of select products, such as BizTalk, Office and Windows Server, to the enterprise edition without having to purchase an entirely new license. To make the switch, customers pay the difference between the licensing fees for the standard and enterprise edition.

Microsoft also added promotional pricing on Rights Management Services for Software Assurance customers and launched a new Product Licensing Web site, which includes licensing terms, conditions and other information on products licensed through volume licensing programs.

The licensing incentives are part of an ongoing effort by Microsoft to boost its two-year-old Licensing 6.0 and Software Assurance programs, which have suffered major growing pains and initial customer backlash.

“Over the past couple of years Microsoft has rolled back some of the most onerous terms and conditions of Licensing 6.0 to give it more value,” says Laura DiDio, an analyst with the Yankee Group. “They’re not cutting the price of software or Software Assurance, but they are continually giving it more value, more bang for the buck and more flexibility. Nothing is going to jump off the page and it is not a panacea, but what they have offered over the past 10 months is a lot. Customers, however, still have to figure out how to take advantage of everything offered.”

In June, Microsoft added a benefit to Software Assurance that allowed corporate customers to install an additional copy of any licensed server software on a “cold” server dedicated to disaster recovery. Microsoft also added to its volume-licensing program MapPoint Web Services, an XML-based Web service that allows developers to integrate location-based services into applications, and Microsoft Office Live Meeting, an online Web conferencing service.

Those additions followed moves in March when Microsoft extended product warranties from 90 days to one year for volume-licensing customers and removed the monetary cap for damages Microsoft will pay when covering patent infringement suits that involved its customers.

Microsoft’s first round of upgrades to its volume licensing program were made in September 2003 when it added training, support and software tools and home-use rights for Office to the Software Assurance menu.

Software Assurance created a firestorm with customers when it was introduced in 2001, and as many as 90% of customers believed it would increase their software costs.

But a recent survey of customers who have adopted Licensing 6.0 and Software Assurance shows that 62% say their costs stayed the same or decreased. Only 12% said they saw significant increases in licensing costs, with nearly two-thirds attributing the increase to non-compliance issues.

Microsoft is sweetening the pot for Licensing 6.0 and Software Assurance at the same time hundreds of thousands of contracts under its former software maintenance model, called Upgrade Advantage, are coming due. Company officials claim 20% to 30% of those Upgrade Advantage customers are converting to Software Assurance.