Microsoft's licensing takes a step in a new direction

The software maker's new "step-up" licensing program gives certain customers a free upgrade from standard to enterprise editions of major products.

Microsoft summarized some recent improvements to its licensing program and launched a Web site devoted to providing users with information about product licensing, terms and conditions.

One of the improvements

Step up is a necessary thing for Microsoft to do.


Paul DeGroot, analyst,

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is the addition of a step-up license, which lets Software Assurance (SA) customers move from a standard edition of a product to the enterprise edition without having to buy a new license. Most of Microsoft's major server platforms are on this list, including Windows Server 2003, Exchange Server and SQL Server.

"Step up is a necessary thing for Microsoft to do," said Paul DeGroot, an analyst at Directions on Microsoft, a Kirkland, Wash.-based consulting firm. "The original rules on Software Assurance really prevented customers -- almost penalizing them -- if they wanted to expand their use of Microsoft's higher-end software."

Previously, the step-up option was offered for a few select products, such as Office and Visio. Kurt Schlegel, a research analyst at Meta Group, Stamford, Conn., said he didn't initially have many inquiries about the step-up program.

An option for expansion

In the past, when customers made a choice between Office Professional and Office Standard editions, the only real distinction was that Microsoft Access came as part of the Office

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Professional edition. Microsoft eventually changed the program by phasing out the Office Professional edition and creating an Enterprise Edition that included more applications.

"So, for customers who choose the Standard Edition based on the previous product packaging, [the step-up program] was a fair way for them to receive the Enterprise Edition without having to buy a whole new license," Schlegel said.

Now that the step-up option is offered for most of Microsoft's server software, Schlegel said it's a nice option for those customers who started off with the Standard Edition and later realized they needed more functionality.

Microsoft also said it is offering a promotion for customers with its SA maintenance agreement. These customers can purchase Microsoft's Rights Management Services client access license (CAL) and SA, for SA only pricing. Late last week, the company said customers with current "Core CAL" licenses or Back Office licenses are allowed to order this offering. Customers can get a number of Rights Management Services CALs up to the number of Core CALs they have, Microsoft said.

"This offer is really just a promotion for a product that will need a lot of promotion," DeGroot said. "It's fairly complex and not widely used."

Enforcement is a challenge

It's still difficult to enforce rights management among a broad section of a company's customers. For example, an organization needs to have all its users on Office 2003 and it also needs a special server in place to handle certificates. "It's not a simple thing to do," DeGroot said.

There are many Microsoft customers with SA on their Core CALs, so there is a fairly large installed base that is eligible to take advantage of this, he said.

Finally, Microsoft launched its Product Licensing Web site, an online resource that lists all products and use rights. Customers have one place to go to view information relevant to their use of products.

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