Office, Windows Rentals Go Worldwide

By waiving a longstanding prohibition against rental of its software, Microsoft strengthens its hand in enforcing licensing rules, could see some incremental revenue, and opens the door to new business models and opportunities. The new rental rights permit rentals of Office as well as Windows, and although illegal rentals are likely to continue, the measures give customers who want to be compliant a relatively easy way to do so.

Rental Rights Licensing

The license agreement for most Microsoft software has prohibited renting, leasing, or lending PCs running Windows, Office, and other software.

The main channel for leasing and rentals is the Services Provider License Agreement (SPLA), a program that lets service provider customers pay Microsoft a monthly fee for the software used on rental computers. (SPLA hosters can also rent software that runs in a data center for customers to access remotely.) While the SPLA has lower upfront costs than a rental license, it is not sold everywhere, requires a Microsoft Master Services and Business Agreement (the legal foundation for Microsoft licensing and support programs) as a prerequisite, and obliges service providers to submit detailed monthly use reports to Microsoft. These are barriers to small companies that want to run an Internet cafÉ, hotel kiosk, or a small training center, particularly in emerging markets where few people own computers and small merchants may rent out a few of them to only supplement other business activities. Even larger leasing firms may find rental rights to offer greater flexibility and lower prices in the long run.