The Future of Microsoft Licensing

Licensing is and will continue to be strategically important to Microsoft. The lion’s share of the company’s revenue comes from licensing its products to corporate customers, and licensing programs provide an important vehicle for building customer loyalty, fending off competitive threats, promoting strategic products and technologies, and increasing revenues. However, Microsoft’s licensing policies and programs have not always worked as well for customers. Many feel the system is too complex, too hard to administer, and has too many unknown variables, making business planning next to impossible. The Volume Licensing 6.0 program, and Software Assurance (SA) in particular, have been especially controversial.

Changing the Rules

Microsoft has already made some significant moves to modify its licensing program, primarily by adding a broad variety of technical support and employee benefits to SA that will increase its value at least somewhat for most customers and very significantly for others. Although it has not touched the basic upgrade and purchase rules around SA, the company appears willing to bend these rules occasionally, and as SA rights begin to expire in 2004 the company could find that it needs to make further accommodations to get customers to renew SA.