Microsoft Moves To Simplify Its Volume Licensing Contracts

Microsoft is simplifying its customer volume licensing contracts, a move the software vendor says will make life a little easier for its channel partners. The changes being implemented through the rest of 2007 include reductions of 10 percent to 50 percent in contract lengths, increased use of standard language and the elimination of multiple signature pages.

While the document changes are hardly ground-breaking, Microsoft resellers who have complained for years about the complexity of working with the vendor's licensing agreements will welcome anything that makes that chore easier.

"That's a great first step," said Dave Sobel, president of Evolve Technologies, a Fairfax, Va., solution provider and Microsoft partner. But he'd like to see Microsoft go further and simplify its licensing terms and practices, such as making it easier for customers to figure out what licenses they need based on their software configurations. "Some distributors have whole departments devoted to Microsoft licensing," he noted.

The changes apply to Microsoft Enterprise Agreement, Select License and Open License documents. The changes are being phased in between now and the end of the calendar year.

"There was a level of complexity in the contracting process that we've been able to eliminate," said Vincent Pickering, a Microsoft senior attorney with the company's volume licensing program. Reducing the complexity of the volume licensing agreements should simplify reseller-customer negotiations and speed up the sales cycle, the attorney said. Also, VARs' sales representatives will need less training to work with the simplified contracts, Pickering said.

Microsoft will eliminate the multiple signature pages that are scattered most agreements, replacing them with a single signature form. That change alone will eliminate a lot of needless paper shuffling customers and channel partners must deal with, Pickering said.

Microsoft is also making the volume licensing contracts easier to navigate by adding a table of contents and summary titles. And the company is creating a single template with standard wording and content flow for all the contracts, replacing what Pickering said was six or seven different versions of the documents. And a new Website, the Volume Licensing Service Center, will help customers manage their licensing agreements, create a summary of all licenses the customer owns, and find and download software that's available to the customer under their agreement.

In another complexity-reducing step, starting in October Microsoft will consolidate the number of product SKUs and price points included in each volume licensing program. For example, English, French and Japanese versions of the SQL Server database are represented today on price lists as separate SKUs with prices varying according to language and quantity. The result is more than 8 million product price points worldwide, according to Microsoft. Under the consolidation individual languages will be eliminated from the price list in favor of a single language license. That move alone, for example, will reduce the number of SKUs under the Select License by 72 percent and the number of price points by 51 percent, according to Microsoft. Prices themselves will not change, however.