Software Licensing Experts: Microsoft's New Volume Agreement Isn't As Short And Simple As Advertised

Microsoft debuted a new volume licensing agreement earlier this year, touting it as a simplified -- and much shorter -- version of the software giant's existing agreements.

It's called the Microsoft Products and Services Agreement (MPSA) and, according to Microsoft, it's just 8 pages long, compared to 37 pages for the Select Plus agreement it's replacing.

Microsoft said it was able to chop lots of bulk from the MPSA by using simpler language and cutting out duplication. Having a shorter agreement would make things simpler for customers to understand, Microsoft said when it rolled out the MPSA in the U.S. in July.

[Related: Microsoft Pitching New Volume Licensing Program As Customers' On-Ramp To The Cloud]

But two Microsoft licensing experts -- who've built careers around decoding the complex minutiae of Microsoft licensing -- told CRN this week the MPSA is much longer than 8 pages when other associated documents are factored into the tally.

The MPSA also includes links to webpages on the Microsoft site, which include detailed information about the agreement and can run several pages long, they said.

When these linked pages are taken into account, the actual length of the MPSA agreement is "quite close" to that of Select Plus, Tim Hegedus, senior analyst at Miro Consulting, a Woodbridge, N.J.-based firm that helps Microsoft customers with licensing matters, told CRN.

The MPSA includes a number of references and links to a document called the Licensing Manual, which is part of the contract but isn't counted in Microsoft's 8-page tally, Paul DeGroot, principal analyst at Pica Communications, a Camano Island, Wash.-based Microsoft licensing consultancy told CRN.

"The manual contains many terms that used to be agreement language. For example, many paragraphs in the licensing manual were lifted from the Select Agreement, so the Licensing Manual is really part of the agreement," said DeGroot.

"Many critical provisions have been put in the Licensing Manual, which appears to be a document that Microsoft can change at will," DeGroot said. "While Microsoft says its documentation is being simplified, and the MPSA is shorter, this is mostly a shell game."

Richard Smith, general manager of Microsoft's World Wide Licensing & Pricing (WWLP), told CRN Microsoft's 8-page count for the MPSA agreement only includes the "core terms and conditions" necessary to start buying online services.

Smith said Microsoft was careful to do an "apples-to-apples comparison" between the core terms of the MPSA agreement and those of its Select Plus and Microsoft Online Subscription Agreement (MOSA).

Microsoft "feels very good" about its claim that the core terms of the MPSA agreement amount to 8 pages, Smith said.

NEXT: Why Licensing Experts Think The MPSA Is Much Longer Than Advertised

When all the associated documents are factored in, the MPSA is closer to 30 pages, according to the licensing experts.

In addition to the 8-page core agreement, there's a registration process that includes four pages of customer information, elections and signature information, Smith acknowledged.

The Licensing Manual is 17 pages long, and it includes agreement language from two existing documents that weren't previously counted in the 37-page tally of the Select Plus agreement, according to Smith.

The Licensing Manual contains Software Assurance information -- which had previously been part of a separate document called the Product List -- as well as content from Microsoft's Product Use Rights document, he said.

While counting the Licensing Manual brings the total MPSA page count to 29, Smith said the information it contains actually simplifies the volume licensing process for customers.

"The goal of the Licensing Manual was to make it simpler and easier to find relevant operational mechanics specific to the MPSA," said Smith.

But licensing experts aren't just concerned about the overall length of the MPSA agreement. They're advising customers to also be aware that Microsoft can, and does, change the content in the websites it references in the MPSA agreement.

"The content within the referenced sites can change without notice, and this could introduce changes to licensing rules without an amended agreement being inked by the customer," Miro Consulting's Hegedus said.

"In general, Microsoft is putting more and more contract language into documents like this and into web pages referenced from URLs, making the agreement more opaque and more difficult for customers to manage," DeGroot said.

"Many contract management systems aren't set up to follow web links accurately and record their text as part of the total contract, which they are," DeGroot added.

Microsoft notifies customers when it makes changes to the MPSA agreement language by posting the updated documents to its volume licensing website, and also does blog posts when adding new feature to MPSA on its Volume Licensing blog, said Smith.

Smith said referencing URLs in software agreements is an "industry-standard practice," but added that Microsoft has tried to minimize the amount of links it uses in the MPSA.

As for the frequency of the changes, Smith said Microsoft updates its Product List monthly and its Product Use Rights document on a quarterly basis. Microsoft has changed its Licensing Manual only once, doing so last month when it added Software Assurance capabilities to its MPSA platform, Smith said.

"Our competitors have got a lot of links. That's how we're trying to differentiate ourselves," said Smith. "We like to think of MPSA as an evergreen agreement, built not to change often -- if it changes at all."

NEXT: Why The MPSA Is A Step In The Right Direction

Microsoft had been pledging to simplify its licensing for many years, and MPSA looks like the first real traction it has gained toward this goal. Microsoft plans to roll out the MPSA to customers worldwide by next July.

The MPSA gives customers a way to buy on-premises software and cloud services together in a single agreement. This is also possible with a 3-year Enterprise Agreement, but the MPSA doesn't lock customers into a term contract and lets them pick and choose only the products they want.

The size of the MPSA agreement, and Microsoft's use of links to web-based documents, aren't likely to dissuade customers from choosing the MPSA, but they're something customers should be aware of, according to the licensing experts.

Amy Konary, an IDC research vice president who helps large enterprises figure out software pricing and licensing, told CRN Microsoft has made some important simplifications to the MPSA agreement language.

"The problem customers want to solve isn't that the agreement has too many pages, but getting everyone on the same page and having one source of the truth," Konary said. "From my perspective, it's not so much how long it is, but is it easier to understand than before? I think that is the direction Microsoft is moving in."

PUBLISHED OCT. 3, 2014