Microsoft bends on small business software licenses

Microsoft Tuesday said that it will launch a program early next year aimed at easing the financial burden for small and midsized companies that sign multiyear contracts to license its software.

Called Open Value, the licensing program will allow some customers to spread out software payments over a period of three years when purchasing products such as the Windows operating system and Microsoft Office. It is comparable to “zero-down” financing, a Microsoft spokeswoman said Tuesday in an e-mail.

Currently, customers who sign up for the Redmond, Wash., company’s enterprise licensing agreements, known as License 6.0, have to pay an up-front fee in addition to annual fees over the life of two- or three-year contracts. Microsoft enacted that new licensing model in July and has received mixed reviews for it from customers and analysts.

Microsoft said Open Value will be available in North America in early 2003. Eligible customers are those with anywhere from five to 500 PCs, the spokeswoman said.

However, research company Gartner said in a research note last week that Open Value is slated to go into effect on March 1, 2003.

A similar program launched in Europe, the Middle East and Africa in September 2002, according to Gartner.

Open Value will appeal to small and midsized businesses that plan on upgrading more than every 3.5 years, or those who want to standardize on Microsoft software, Alvin Park, a research director with Gartner, said in the research note.

To reach small and midsized customers with the plan, Microsoft has implemented a training program for its channel partners, who will be able to sell the plan to those customers, the company said.

Until its availability in 2003, some Microsoft customers will be able to take advantage of a similar “no-money-down” offer through financing programs set up by outside creditors, Microsoft said.