Microsoft announces new licensing prices

Microsoft is restructuring its Enterprise licensing agreements with a new pricing scheme designed to push the move to 'software as a service'.

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By  Michelle Sturman Published  May 29, 2001

Microsoft has released details of its latest Enterprise licensing price structures that come into effect at the start of October.

The new price programmes are intended to simplify licensing for enterprise customers, and to provide a subscription service to move towards ‘software as a service’, but analysts claim that the schemes could double the cost of licensing to some companies.

The subscription model is intended to offer companies a simple fee per PC per year, which, said Bill Henningsgaard, VP of worldwide licensing and pricing at Microsoft, should simplify management of licences and provide enterprises with flexibility.

“Subscriptions can be attractive to companies that prefer to spread their licensing costs, for those that see wide fluctuations in computer usage or wish to treat software as an operating expense rather than an asset,” he said.

Microsoft admits that this model may not fit every company.

“We estimate that if you upgrade less than twice every three and a half years, then it is not worth it for that,” said Etienne Jacques, sales director for Microsoft GEM.

“But definitely what we have seen with the annuity agreements has so far shown some reduced costs for the customers—it all depends on how often the customer wants to upgrade.”

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