Microsoft tries again to streamline volume pricing

Latest move by Microsoft to improve and simplify product licensing terms

Another aspect of Select licensing that is different in Select Plus is that Microsoft has eliminated the forecasting element of the license. In Select licenses, customers would have to forecast what they were going to spend with Microsoft over the next three years to determine their volume-discount level.

If they were to underforecast and end up making a larger purchase, they would have to sign a new contract to get the higher volume discount, Blackley said.

In Select Plus, the discount level is set based on the customer's actual purchasing over the course of the year, he said.

This also means that new customers who sign up to the program would get discounts on the back end at the end of the year, rather than upfront when they purchase. However, since many customers signing up for Select Plus are already Microsoft customers, their spending and thus discount level can be determined by their existing purchasing, Blackley said.

Microsoft has been tweaking its licensing programs for several years because customers have complained about how complicated it is to buy multiple products with different licensing structures. However, Microsoft risks making its licensing terms seem even more complex with all of the changes the company has made.

Forrester's Jones said that the research firm sees "a regular full house" in its training workshops for helping companies navigate the complexity of Microsoft licensing.

"I think there is a lot of demand from people like us to explain it all to them," he said.

Traditional software licensing in general faces pressure from changes in the industry, with some products being licensed on a subscription basis rather than through multi-year contracts.

Microsoft is adapting to these changes by offering some of its business software on a subscription basis, but it still has a legacy of traditional software licensing to contend with as it makes the transition.

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