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Microsoft broadens licensing programs

Microsoft broadens licensing programs

Realising the huge sales potential of the small business market, Microsoft has broadened the scope of its software licensing programs to include businesses with as few as 10 PCs.

The new arrangement is an extension of Microsoft's Open License program, which involves customers paying to use a set number of copies of a software product, rather than buying individual boxes. Each product is given a points weighting. Users qualify by ordering products to a certain point value, and in return they receive a discounted price rate. The greater number of points they buy means a greater discount level.

Under the new system the minimum point threshold falls from 50 to only 20 points. Microsoft's senior marketing manager Stephen Howard believes the new threshold is within most companies' reach. He also feels it represents a significant opportunity for the channel. "From the reseller's perspective it's quite attractive, because apart from being able to offer attractive pricing, working like this with a customer they start to build much more of a relationship," said Howard.

He said the new system opens Microsoft's Open Licensing up to companies with around 10 PCs or less, a market opportunity he believes to be in the vicinity of 900,000 companies.

"What I'm saying to resellers is there's a new market for you now to go and talk to about licensing. Now a lot of them will continue to buy box product, because they are small offices with one or two computers. But there's still a tier where they want one box, they don't want lots of boxes."

Customers who purchase an Open License receive a CD containing the software they requested, which either they or their reseller can install. Training and installation manuals are also included. A formal licence agreement is drawn up with Microsoft, with honesty used as the basis for companies to not install more copies than was agreed.

Once a company purchases an Open License Howard says they can continue to reorder at that same price for the next two years. They can also take out product maintenance in the form of option of upgrade insurance, and receive double points weighting on the products they buy. Thus all costs of software upgrades over a set period are factored into the initial purchase price.

Howard said he is not concerned that the honesty principal Open License works on will be abused. "We know the sectors of the market that steal software, we know the ones that inadvertently steal, and we've got an anti-piracy program to try to address those," he said.

Information on Microsoft's Open License program is available on 1800 060 740, or on the internet at www.microsoft.com/select.


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