Microsoft changes its licensing terms

Microsoft is offering a single Microsoft Products and Services Agreement (MPSA) to simplify its volume licensing agreements. What do the changes mean for software asset management?

It has introduced a new agreement to on-premises software, online services, and hybrid products and will provide a suite of licensing tools.

The company said the new web-based tools will allow users to make purchases and choose payment options; view of licensed assets and purchases; and, over time, collect business intelligence to inform planning and purchasing.

In a blog post announcing the changes, Richard Smith, general manager at Microsoft World Wide Licensing & Pricing (WWLP), wrote: "With the rapid adoption of cloud and hybrid computing, and the proliferation of devices that are increasingly essential to productivity, volume licensing customers are asking for new flexibility to license wide-ranging scenarios, and for greater simplicity to help them manage it all."

Commenting on the changes, Martin Thompson, analyst at The ITAM Review, and founder of the Campaign for Clear Licensing, said: “Any news of Microsoft making things ‘Easy and Flexible’ is to be judged with scepticism based on their previous form. At face value this looks like some new acronyms to learn as Microsoft its agreements to the Ballmer’s parting ‘devices and services’ announcement in July."

Thompson is leading a campaign for the software industry to improve terms and conditions in software licensing, called the Campaign for Clear Licensing.

He believes Microsoft's decision to offer new systems and tools to manage Microsoft investments is a step in the right direction. But he said: "Tools such as MAP (Microsoft Assessment and Planning toolkit), SCCM (System Center Configuration Manager) and Intune tend to generate copious amounts of configuration-level detail and precious little business intelligence to aid buying decisions."

He said that to remain relevant and competitive within the enterprise, Microsoft desperately needs to hack away at its licence program complexity and make agreements easier to manage. For many organisations, the benefit of owning Microsoft software is being outweighed by the headache of managing it, they are voting with their feet and choosing simpler, easier-to-manage alternatives”

Simplification should lead to less paperwork, according to senior software asset management consultant, Rory Canavan: “Consolidation of required paperwork should quicken the process of acquiring and managing MS software.

Microsoft should be cautious not to introduce yet more complexity in the name of simplification

Matt Fisher, Snow Software

The question for businesses is how Microsoft manages contract changes. "I suspect this will require more in-depth changes at Microsofts' own back-office operations.

Matt Fisher, vice-president of marketing at Snow Software warned: "Microsoft should be extremely cautious not to accidentally introduce yet more complexity in the name of simplification. The fact is that even if Microsoft changes the way products are bought today, that doesn’t necessarily change the legacy – and instead of having to manage 10 or so types of Microsoft licensing, now organisations will need to manage 11. That’s going to be a tough sell, even if the intentions are noble."

The real challenge to Microsoft is to amend its back-office functions to help customers rationalise their licences so they are not left with a spaghetti-like mess of licences depending on when they were bought, under which prevailing agreement.