Expert Says New Microsoft Volume Licensing Program Could Be 'Major Departure'

For years, Microsoft licensing programs have confounded even the tiny group of Earth's residents who've made a career out of studying and explaining them to Microsoft customers.

Now Microsoft says it's committed to making its volume licensing simpler for customers to buy and manage.

According to published reports, Microsoft began rolling out a new volume licensing program -- called the Microsoft Products & Services Agreement (MPSA) -- this week in the U.S., U.K., Germany and Canada.

[Related: Expert: New Microsoft Enterprise Licensing Program Could Raise Costs ]

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A Microsoft spokesperson contacted by CRN declined to provide additional information about the MPSA.

But in a carefully worded Nov. 15 blog post, Richard Smith, Microsoft's general manager of worldwide licensing and pricing, said Microsoft has been "listening" to customers' licensing concerns.

"The new agreement supports customers' choice from the entire array of Microsoft on-premises software, online services, and hybrid solutions to suit business needs and optimize technology spending," Smith said in the blog post. "This results in one signing event, fewer terms and conditions, and greatly reduced number of steps required to complete a volume licensing agreement."

Here's what's happening: Instead of having different licensing agreements for small, medium and large customers, Microsoft is pitching the MPSA as a single agreement that covers everyone and all of its products.

Paul DeGroot, principal analyst at Pica Communications, a Camano Island, Wash.-based Microsoft licensing consultancy, told CRN this would be a welcome development. "This looks like a major departure and it is something that Microsoft has been hinting at for a long time," DeGroot said in an email.

That said, DeGroot said Microsoft hasn't yet made available a copy of the MPSA agreement. Until that happens, he's advising customers to be cautious about signing one.

"The big question is whether this agreement replaces anything or whether it's just one more agreement," DeGroot told CRN. "Microsoft has struggled to find something that would encapsulate on-prem and cloud licensing efficiently, and this is another stab at it."

Vlad Mazek, CEO of Own Web Now, an Orlando, Fla.-based Microsoft partner focused on small and medium-sized businesses, isn't waiting with bated breath for details of the MPSA to emerge.

That's because Microsoft licensing is no longer a lucrative business, Mazek said. "Let me put it to you this way -- I do not know a single person that resells Microsoft licensing anymore in SMB," Mazek said in an email. "Most have their clients rolled out with Microsoft directly for Open or Software Assurance, and some are doing Office 365 for the Office suite."

NEXT: Microsoft Partners Optimistic About Licensing Changes

Other Microsoft partners who've read Smith's blog post are more optimistic about the MPSA.

"This is a welcome simplification to Microsoft Volume Licensing program that will decrease closing friction and reduce customer confusion about software licensing options," John Gilham, principal cloud architect at Agile IT, a San Diego-based Microsoft partner, said in an email.

"They're giving customers a single master agreement [that] will consolidate the 3 to 8 different Microsoft agreements customers typically have to manage in a 200-person organization," Gilham told CRN.

Simpler licensing would not only be easier for customers to understand, it would also make life easier for Microsoft partners.

Conducting licensing training with staff and keeping track of changes to Microsoft volume licensing programs have been an "immense challenge" for Agile IT over the years, Gilham said.

"Due to this complexity, we needed to dedicate licensing specialists to stay on the leading edge of market changes," he said. "The result of this was a slowdown in deal velocity when the sales team needed to bring in licensing specialists to present 3 or 4 options to a customer."

Microsoft isn't just simplifying its licensing; it's also revamping volume licensing systems that have suffered technical glitches in the past. Microsoft's Volume Licensing Service Center (VLSC), in particular, has caused headaches for customers and partners on numerous occasions.

Smith said in the blog post that Microsoft is building new volume licensing systems "from the ground up," including Web-based tools for purchasing and choosing payment options. Customers will also be able to "manage investments" by accessing a unified view of what they've bought, Microsoft's Smith said.

Pica's DeGroot said the language about MPSA taking less time to manage is a "yellow flag." He said customers "have always been able to reduce the time they spend managing their Microsoft agreement by just signing a new or renewal contract, no questions asked."

In a Nov. 29 blog post, which has since been deleted, Richard Gibbons, a software manager at U.K.-based Microsoft partner Bechtle Direct, said simplifying the "overall structure" of Microsoft volume licensing and also its management is "definitely a move in the right direction."

Later, Gibbons described the MPSA as "the first comprehensive, overall change to the volume licensing structure since the days Ballmer had hair." it would be tough to find a more profound assessment of the changes the MPSA represents.