Microsoft introduces subscription-based licensing

Microsoft is introducing subscription licensing for mid-sized and enterprise customers.

Microsoft is introducing subscription licensing for mid-sized and enterprise customers.

A new licensing model, called "software assurance", will allow customers with more 250 PCs to pay a yearly subscription for products such as Windows Professional and Server, Office, the.Net Enterprise Servers and other enterprise products. Customers will be able to upgrade to the latest version of products released during the term of their agreement at no extra cost.

Microsoft New Zealand believes the new approach will benefit the 80% of enterprise customers who upgrade regularly. The other 20% who upgrade infrequently (an average of four years or more) will still be able to buy a traditional or perpetual licence. If they want to upgrade within the next two years Microsoft recommends they buy an "upgrade advantage" licence.

"Software assurance" replaces the range of upgrade licences currently available to enterprise customers including "version upgrade" (VUP), "product upgrade" (PUP), "competitive upgrade" (CUP) and "upgrade advantage" (UA).

Microsoft sales and marketing director Ross Peat says if customers want to take current versions, they have until September 30. "Software assurance" kicks off on October 1.

Peat says enterprise and mid-sized customers can convert current agreements to "software assurance" licences.

For accounting purposes subscription licensing gives companies the option of listing their software as an expense rather than a capital asset.

While "software assurance" is a global licensing change, at the personal user level Microsoft is trying out “end-user subscription licensing” in New Zealand, Australia and Brazil only.

New Zealand customers will be able to get Office XP through subscription in contrast to those in the US, where Microsoft has rescinded such plans.

Under the subscription-licensing model, customers get the option to buy a yearly subscription to Office XP and receive free upgrades as new versions are developed.

Microsoft New Zealand product marketing manager Bridgett Reeves says if a customer decides not to renew the subscription they will continue to have access to Office-created files but with limited functionality.

Office XP Professional includes Word, Excel, Outlook, PowerPoint and Access and will be available from May 31 for $439 a year. Office Pro will have a recommended retail price of $1649 including GST. The Office Pro upgrade will have a recommended retail price of $959 including GST.

A small office version of Office XP, which includes Word and Excel, will also ship on August 30 but pricing has not been finalised.

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