A "licensing simplification" effort in fall 2007 introduced many changes of varying significance to Microsoft volume licensing. The company now bans the resale of licenses, offers greater payment flexibility to its largest customers, and has changed the way it distributes software to volume customers. Other changes include streamlined paperwork, Web site revisions, and changes that will benefit educational users. However, the changes will have no impact on prices and will not simplify Microsoft's complex licensing structures and rules.

The changes fall into three categories: volume licensing rules, contracts, and operations.

Changing Rules on Resale, Academic

Rule changes affect companies that resell volume licenses and academic institutions.

Sale of licenses explicitly forbidden. In recent years, several brokers have sprung up to promote sales of volume-licensed Microsoft software that a company no longer requires, most commonly because of bankruptcy. All contracts still permit companies to transfer licenses in the event of restructuring changes, such as acquisitions, mergers, or divestments, but companies that go out of business are not permitted to transfer licenses to another firm for resale. At least one such firm in the United States, Wasatch Software, has ended resale of previously owned licenses, although a British reseller, Discount-Licensing.com, says it continues to manage the transfer of certain categories of volume licenses (whose agreements did not require Microsoft's prior consent) from bankrupt companies, with Microsoft's approval.

Academic agreement changes. Academic organizations gain more flexibility in offering Microsoft products to students. They can use volume licensing media (obtained through the Select for Academic program) to install software on student computers as long as they install it at a secured central location, reducing the need for students to separately obtain academic editions of Microsoft software.

Contract and Pricing Simplification

Both contracts and price lists have been simplified, which should make it easier for Microsoft employees, resellers, and customers to submit valid contracts. (Contracts are frequently sent back because of errors.)

Simpler contracts. The company has reduced the length of licensing contracts to make them easier to understand, continuing a process begun some years ago. Among other things, all volume contracts will have a similar outline and headings, making it easier to identify specific contract sections. Companies will need to sign on only one page of the contract (which lists all the documents covered by the signature), streamlining the contract signing process for some companies.

Price list simplification. The company is changing the way it describes volume licensing products available in different languages. In the past, each language version of a product had its own stock keeping unit (SKU) number. Many different language versions will now be given a single price point and will be identified "single language." For example, "SQL Server English" and "SQL Server German" will now be consolidated under a "SQL Server Single Language" SKU. (The software will still be delivered in the customer's choice of language, however.) These steps will reduce the number of SKUs by 32% in the Open program and 70% in the Select program.

Payment, Delivery Changes

Volume licensing operations will be affected by more flexible payment options for customers, new procedures for delivering volume media, and better online services for volume customers.

Payment flexibility. Customers with Enterprise Agreements have generally been required to make annual payments for their software, but an Extended Payment Terms option will let customers pay monthly, quarterly, semiannually, or on a custom schedule. For example, a custom schedule could specify lower initial payments, giving the customer more time to incorporate payments into their budgets. Customers will be able to access extended payment options not only at the initial signing of their agreement but also at an anniversary date, a true-up period, or other times. The options available to customers may vary by country.

Revised software delivery. In the past, customers with Select and Enterprise agreements would get monthly shipments of disks of Microsoft software and updates to ensure that they had access to the latest versions of all the software they owned, as well as software that they might want to purchase. However, many customers were inundated by disks that they did not need, but had to organize, store, or destroy. The use of volume license keys associated with the customer (as opposed to keys associated with a particular physical disk) has given Microsoft more flexibility, including the ability to make software available for download and to deliver licensing keys electronically.

Microsoft will now ship a set of disks that contain the most commonly licensed software, such as Exchange Server, Office 2007, SharePoint Server, Windows Server, and Windows Vista. Customers can order disks for other software separately or can download the software from the Microsoft Volume Licensing Services site, where all monthly software updates are available.

Volume Licensing Service Center. To deal with complaints about the Web site where customers go to review their volume licensing purchases, the company has created a new back end for its eOpen (used for the Open License program) and Microsoft Volume Licensing Services sites. The new Volume Licensing Service Center, accessed through the existing licensing sites, makes it easier for customers to download volume software, obtain volume licensing keys, and review their previous purchases.

Resources

Microsoft's volume licensing Web site is at www.Microsoft.com/licensing.