Microsoft to take flexible SME licensing worldwide

Microsoft's special licensing schemes for small and medium-size enterprises (SMEs) now only available in Europe are a success and will be introduced worldwide, according to a Microsoft executive.

Europe is the only place where Microsoft customers with between two and 250 computers can choose to rent software or buy it, and spread payment out over three years, said Luc Van Ballaer, director of licensing and pricing for Microsoft in Europe, in a recent interview with the IDG News Service. Elsewhere the only option is Microsoft's standard Open License (OL), which requires upfront payment.

The two plans for European SMEs, called Open Subscription License (OSL) and Multi-Year Open (MYO), include Software Assurance (SA), which means all software upgrades released during the contract period are included. This is a change from OL, which does not automatically include upgrades.

"OSL is growing faster than we expected," said Van Ballaer. In Portugal, for example, between 60 percent and 70 percent of deals with SMEs are based on OSL, he said, declining to provide further statistics.

OSL and MYO are similar to Microsoft's worldwide offering for companies with over 250 PCs: the Enterprise Subscription Agreement and the Enterprise Agreement. It is what Microsoft wants for its worldwide licensing scheme, said Van Ballaer, who is based in Brussels.

"This is where licensing is headed. We will also gradually introduce OSL and MYO in other regions, but it always takes between one and two years before you get enough experience to roll out in another part of the world," said Van Ballaer, declining to be more specific about timing for the launch of OSL and MYO outside Europe.

Microsoft of Redmond, Washington, introduced its OSL in Europe about a year and a half ago. Customers sign a three-year contract and pay a fee per year to rent the software. The license is nonperpetual, which means customers have to stop using the software when the contract ends.

In September, Microsoft quietly added MYO, a perpetual form of licensing, which means the customer has the right to use the software indefinitely. This program also offers customers a three-year agreement with payment spread out over the period.

Available under OSL and MYO licenses in Europe are Microsoft's Windows XP Professional and Office XP Professional, as well as client access licenses for Windows, Exchange, Systems Management Server and SharePoint Portal Server. Pricing is based on the number of computers and the products chosen.

When SME licensing is offered outside Europe, Van Ballaer expects both OSL and MYO to be available from the start.

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Joris Evers

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