Licensing Contract, Rules Updates

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.