Microsoft Mulls SMB Volume Licensing Options


However, Microsoft is "seriously considering" volume licensing options that meet the specific needs of small businesses and midmarket customers, and is in the process of researching options that would be of interest to the channel, said Gavriella Schuster, senior director for Windows Product Management, in a recent interview.

Schuster declined to offer specifics on what these packages would include and when Microsoft might offer them to partners. But the fact that Microsoft is even considering this has to be seen as a positive development for the channel.

The core benefit of SA is the right to upgrade to new software versions released during the term of the contract with Microsoft and to spread payments over a three-year period. Microsoft's Enterprise Agreement, a volume licensing program for organizations with 250 or more desktop PCs, includes SA, but is out of the price range for most small businesses.

For an additional charge, SA customers can get the Microsoft Desktop Optimization Pack (MDOP), which includes desktop and application virtualization, inventory services, System Center desktop error monitoring and group policy management tools.

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In 2006, Microsoft added new desktop deployment and office solution services, 24x7 technical support with a fixed number of incidents and unlimited Web support to SA. But at the same time, Microsoft required customers to buy SA in order to get Windows Vista Enterprise, a move that didn't go over well with solution providers.

Earlier this month when Microsoft announced the Windows 7 SKU lineup, VARs were again miffed that Microsoft had relegated advanced features like Bitlocker, Direct Access and BranchCache to Windows 7 Ultimate and Enterprise, which are available only through volume licensing.

Microsoft hasn't cultivated a traditionally close relationship with small business partners, and has conditioned the small business market to assume that new software products come on new hardware, rather than bypassing OEMs, according to Jeff Middleton, a Microsoft Small Business Server MVP in Metairie, La.

"I don't see how they can fix that impression without the unthinkable: offending the OEMs and taking their business channel away," Middleton said. "Until Microsoft figures out what their value-add is to small businesses, or decides to sell directly at a better price, the small business market is likely to resist any attempt to charge them more for features they don't want."

Susan Bradley, a Microsoft Small Business Specialist partner based in Fresno, Calif., also would like to see Microsoft offer SA at a price that makes sense for small businesses. "I can't justify the price tag for the offerings it gives me. The tools they bundle now are not geared for this space, and they just go to waste in my business," Bradley said.

OEM is often a fraction of the price of volume licensing, which means most small businesses only buy a new version of Office when they buy a new PC, said Brad Kowerchuk, president of Bralin Technology Solutions, North Battleford, Saskatchewan.

"If OEM is $250 and licensing is $500, then small businesses will not buy the license, period. No other 'warm and fuzzy' value-adds will convince them to spend the additional money," Kowerchuk said.

With SA, "the current costs may be justified in larger businesses, which can track all of the costs, but for a small business the math is really simple -- and it adds up to too much money," Kowerchuk said.