Responding to criticism from the US government and the IT industry, Microsoft has cut the cost and eased restrictions for software makers who license certain Windows protocols to make their products work better with the operating system.
Microsoft revamped the royalty structure and revised license terms for the Communications Protocol Licensing Program, a program that was put in place as part of Microsoft's antitrust settlement with the US Department of Justice (DOJ) and several US states, the software vendor said.
Royalty charges, previously based on unit shipments, are now calculated as a percentage of the licensee's revenue from products that use Microsoft's technology.
The percentage ranges from 1 to 5 per cent. Also, the royalty prepayment amount has been cut to $US50,000 from $US100,000, Microsoft said.
The license has been expanded to include Windows 95 and Windows 98 in addition to Windows 2000 and Windows XP and future client operating systems.
Other license changes included timing of updates, other logistical aspects and licensees' rights to develop their own protocols, Microsoft said.
The changes in the licensing program had been expected.
A DOJ attorney last week in a hearing with US District Judge, Colleen Kollar-Kotelly, said Microsoft would detail changes this week.
As part of its landmark antitrust settlement in November 2001, Microsoft agreed to make its communications protocols available to third parties on "reasonable and nondiscriminatory terms."
Microsoft started licensing the protocols in August last year but was now revising the licensing terms in response to comments from the DOJ and the IT industry, the company said.
The Windows communications protocols allow other software products to communicate better with Windows. Microsoft currently has a handful of licensees, including EMC, Network Appliance and VeriSign, according to the Microsoft statement.