Microsoft simplifies financing, licensing

Microsoft has unveiled changes to its licensing and financing programs in an effort to simplify how customers buy their software.

Microsoft has unveiled changes to its licensing and financing programs in an effort to simplify how customers buy their software.

As part of the changes announced at its Worldwide Partner Conference 2005, Microsoft streamlined its Open License Value program, changing the name to simply Open Value and making the new program worldwide, eliminating different iterations of the previous program that existed in different countries, product manager (worldwide licensing and pricing), Open Licensing for Microsoft, Sunny Charlebois, said.

The new licensing gives small and medium-sized business (SMB) customers the opportunity to license two new software bundles of core technology, the Professional Platform and the Small Business Platform, under the new Open Value contract.

Charlebois said Microsoft devised the bundles by asking SMB customers across the world which software they were using the most.

"We researched what were the most common platforms people were buying," she said.

The Professional Platform includes Office Professional Edition; a Microsoft Core Client Access License (CAL) for Windows Server, Exchange, SharePoint Portal Server and Systems Management Server; and a Windows Professional Desktop Upgrade. The Small Business platform includes Office Small Business Edition, a Windows Small Business Server CAL and a Windows Professional Desktop Upgrade.

The Open Value program enables customers to track their licenses online through the Microsoft Value Licensing Service, something they could not do with the previous incarnation of the program, Charlebois said.

Partners also have the opportunity to resell Open Value licensing, and set their own margins for those sales.

In addition and perhaps most importantly, she said, partners could provide customers with a single point of sale to purchase products under the license rather than having to send them through multiple channels to complete the deal, as they did previously.

"Before a customer had to go to an authorised license provider or software advisor to get a recommendation and then go to a reseller [to make a purchase]," Charlebois said. "It was a huge pain point."

Microsoft's financing arm also has gotten a bit of an overhaul this week. For starters, the name of the division itself has changed, from Microsoft Capital to Microsoft Finance.

Confusion over the role of the three-year-old division inspired the name change, said Brian Madison, general manager of Microsoft Finance. "We started getting calls from companies looking for venture firms and decided to go with Microsoft Finance to make sure customers know what business we're in," he said.

The new financing model eliminated the need for 20 per cent of a customer transaction to be sales of Microsoft product in order to qualify for financing from the vendor, Madison said.

"Now as long as there is Microsoft content in a transaction we will finance it," he said. "We are all about simplification and we are putting out the premise that we want financing to be ubiquitous. We want financing for every transaction."

Both the financing and licensing divisions have shortened customer contracts considerably to help simplify transactions as well, the executives said.

Financing deals under $US500,000 are now only one page front and back as opposed to the previous length of seven pages, Madison said, whereas deals over that hadbeen condensed to three pages from contracts that were about 15 pages.

On the licensing side, contracts had been shortened from 22 pages in the previous version of the program to nine pages in the current Open Value program, Charlebois said.

Shortening contracts not only simplifiedthe overall transaction but reduced the time it took for customers to place a software order, she said.

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