Microsoft Tries Again to Streamline Volume Pricing

Today's Best Tech Deals

Picked by PCWorld's Editors

Top Deals On Great Products

Picked by Techconnect's Editors

Microsoft is set to unveil a new program that allows its larger customers to combine separate product licensing agreements under one master contract, which could help them to get bigger volume discounts.

The move, expected to be announced Tuesday, is another step in a series of changes intended to improve Microsoft's product licensing terms and make them easier for companies to navigate.

The new Select Plus program is an upgrade to Microsoft's existing Select volume-licensing program. Select Plus allows customers who have multiple purchase contracts -- at different departments in a large company, for example, or even in different countries -- to combine them all into one master contract, said Chris Blackley, a director with Microsoft's Worldwide Licensing and Pricing Group.

This will allow customers to "aggregate" all of the purchases they make and "drive a higher volume discount," because the combined amount purchased will often put them into a different licensing class, he said.

Microsoft puts customers into different licensing classes depending on how much software they purchase, and the discounts they get -- which are often negotiated with authorized Microsoft resellers -- range from about 10 percent to 25 percent depending on the licensing class the customer is in.

Select licensing members with 250 or more desktops can migrate to Select Plus when any one of their contracts with Microsoft comes up for renewal. Other contracts can then be added to the Select Plus contract even if they haven't expired yet, Blackley said. There are no fees associated with moving from Select to Select Plus.

With Select Plus, Microsoft is also changing the way that Select license agreements relate to Software Assurance (SA), Microsoft's oft-criticized software maintenance and upgrade program.

SA is a three-year license agreement. But if customers sign up for SA six months into the year of a Select contract, they still pay for the whole first year of SA, along with the two subsequent years. Microsoft does not pro-rate SA for any contract time lost under Select licensing, Blackley said.

Select Plus does not work that way. A customer will now get the entire three years of SA -- for the same price as a Select licensee would pay for an abbreviated agreement -- no matter when they sign up for SA, Blackley said.

It was criticism from customers that led to the changes Microsoft is making to SA with Select Plus, Blackley said. "Customers were very vocal on that and we're trying to fix it," he said.

Microsoft has been tweaking its licensing programs for several years because customers have complained about how complicated it is to buy multiple products with different licensing structures. However, Microsoft risks making its licensing terms seem even more complex with all of the changes the company has made.

Traditional software licensing in general faces pressure from changes in the industry, with some products being licensed on a subscription basis rather than through multi-year contracts.

Microsoft is adapting to these changes by offering some of its business software on a subscription basis, but it still has a legacy of traditional software licensing to contend with as it makes the transition

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.
Shop Tech Products at Amazon