Microsoft, Small Business Partners Spar Over Office Licensing

Eric Ligman wants Microsoft partners to know they're doing their customers an egregious disservice by recommending the purchase of retail box software.

Ligman, Microsoft's senior manager of community engagement for small business in the U.S., earlier this week raised hackles in Microsoft's small business channel community by railing against unnamed partners for steering their customers wrong with regard to licensing for the Office productivity suite.

In a Monday post on Microsoft's Small Business Community weblog, Ligman urged business owners to "Fire any consultant who tries to sell you Office 2003, especially Retail Box", and implied that Microsoft partners who engage in such tactics are not only giving bad advice, but could also be cheating their customers.

"They are not looking to provide you with the best option since they are selling you something that will cost you more in the short-term and the long-term (Maybe they are just trying to get more money out of you without you knowing it)," wrote Ligman.

Microsoft launched Office 2007 for business customers through volume licensing in November of last year and released it to retail and OEM channels in January. However, demand has remained strong for Office 2003, and Microsoft has responded by allowing volume licensing customers to downgrade their copies of Office 2007 to Office 2003.

Several Microsoft partners took issue with Ligman's statements and posted their rebuttals in the comments section of the Small Business Community weblog.

"What percentage of your own employees do you think could explain your licensing terms across product lines? Let's face it, less than 10 percent could even explain licensing for just the Office product line," one partner wrote.

"Telling business owners to fire their consultants is rather irresponsible on your part, especially since it takes a Microsoft Licensing Specialist to even try to explain your myriad methods of licensing and special pricing for select customers," wrote another partner.

Sources told CMP Channel that Ligman has been known to take controversial stances at times in order to get his point across to Microsoft's small business community.

"Ligman's main purpose at Microsoft is to get small business partners to buy Open License. And as the main evangelist for volume licensing, when he sees partners buying box product, that goes directly against his preaching," said one Microsoft Small Business Specialist partner who asked not to be named.

NEXT: Microsoft's Ligman Responds

In a Friday interview with CMP Channel, Ligman said his earlier statements were aimed at motivating partners to give their feedback on the Office licensing issue. "Getting information out to partners can be challenging, and when people hear licensing, they tend to tune it out," he said.

Ironically, Microsoft licensing terms are so complex that some of its own field sales staff don't fully grasp its intricacies.

Paul DeGroot, an analyst with Directions on Microsoft, has run into situations where a field rep has told a customer to do something that, in his opinion, violates Microsoft's licensing terms.

"In another case, the customer was told that they couldn't do something that the rules quite explicitly permit. The risk here is that the field's advice is not shaped by licensing rules, but by sales considerations," said DeGroot. "In other cases, a customer wants to do something that could reduce the number of licenses they buy, so the field says they can't do it."

In Microsoft's small business channel, the problem is that most resellers don't have a solid enough understanding of the requirements and the opportunities that volume licensing represents, solution providers said.

"Microsoft could definitely help themselves by getting their resellers to understand the rules to play by," said Adam VanDreumel, account manager with Delios Computer Solutions, Grand Rapids, Mich. "Personally, I want to make sure I'm using what I'm paying for."

Anne Stanton, president of The Norwich Group, an IT consulting firm in Norwich, Vt., says licensing terms for small businesses can often be more complex than those for enterprises. "In small businesses, particularly with virtualization, licensing is becoming a struggle," she said.

For his part, Ligman believes that understanding licensing terms is a shared responsibility between Microsoft and its partners.

"Channel partners are running their businesses; we know that, which is why we try to get the training out to them in many different ways," said Ligman. "Part of that is partners taking a few moments to look at [the licensing training] and understand that it is a part of their business, and that having that knowledge can really help."

While it can be challenging for partners to get smaller businesses to see the value in volume licensing, it's ultimately the best course for partners to follow, according to Kevin Baylor, principal at Aequus IT, a solution provider in Bradenton, Fla.

"It's in customers' best interest to buy volume licensing packages such as Open Business [which includes five or more licenses for any combination of Microsoft products]. It can be more expensive, but it's the right thing to do," said Baylor.