Recent changes in Microsoft Corp.’s licensing options will have limited impact on customers, but IT managers are still wishing the software company would simplify its complex licensing agreements.Changes to Microsoft’s Open Value licensing program for mid-sized companies, announced at its Worldwide Partner Conference in July, take effect in Canada this month. Microsoft has also announced some enhancements to Software Assurance, a licensing maintenance option under which customers pay a fixed amount and are ensured access to upgrades along with various support, deployment and training assistance. Those changes will take effect in Canada in March.
Lora Gernon, director of Microsoft Canada Co.’s partner sales group, says the main effect of changes in the Open Value program on customers will be to give them more choice in whom they deal with.
Previously, Gernon says, only a select group of dealers were authorized for the Open Value program. Now all Microsoft VARs will be able to do so, allowing customers to work with resellers they choose.
Apart from that, the changes to Open Value are mainly a matter of rationalizing a mishmash of different versions of the plan that have evolved in different countries into a more consistent global offering.
“The changes to Open Value will make it slightly easier for partners to sell it,” says Paul De Groot, an analyst with Directions on Microsoft, a Seattle-area consulting firm. “I don’t know that those changes in particular are very significant.”
Improvements to Software Assurance — which comes with Open Value, but is also available on its own — could have a bit more impact, De Groot says.
One addition is an offer of deployment vouchers, entitling customers to help in deploying desktop applications. But De Groot says this is probably most useful to companies with thousands of desktops, and those customers are likely to have enough expertise of their own that they don’t really need help.
Microsoft is offering help with deploying desktop software partly because a large number of customers have licensed but not deployed the Office 2003 suite, De Groot says.
The changes to Software Assurance, announced in September, also include expanded technical support and special edition of the Windows Vista client operating system called Windows Vista Enterprise.
According to De Groot, Software Assurance may make sense for server software, but for desktop applications the program costs more and delivers less. Standard licence agreements have a lot of advantages over Software Assurance, he says.
That’s the thinking at London Drugs Ltd. Scott Riddell, manager of solutions information technology at the Richmond, B.C.-based retail chain, says his company has a standard licence agreement and a premier support contract rather than Software Assurance. With Software Assurance, he says, “you’re paying in advance for the next version, and it’s sort of a roll of the dice whether or not it’s worth insuring your product.”
The Pembina Trails School Division in Winnipeg relies on Microsoft Select, a licence program for corporate, government and academic customers with 250 or more desktops. But Don Reece, director of IT at Pembina Trails, says the company seems to be trying to push customers toward leasing rather than buying software.
The school division lacks the resources to upgrade software on existing hardware, Reece says, preferring to wait until the hardware is replaced. But it does want to be able to transfer application licences from obsolete machines to others still in use, and Software Assurance won’t allow that, Reece says.
What IT managers most want from Microsoft on licensing is simplification.
“It’s complicated, I’ve got to say,” Riddell says, “which makes it hard every time the contract rolls around for renewal.”
Reece feels his Microsoft representative does a good job of explaining the options. But “if you’re asking me do I read the 50-page software rules that they hand out every year, no.”
One effect of Microsoft’s revisions to Open Value is to reduce the size of the document explaining the plan. But the plans still take some figuring out. “You need to know a lot about your systems and a lot about how Software Assurance works to be able to evaluate the value of these changes,” De Groot says.

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