Microsoft To Offer SMBs Subscription Based Volume Licensing

Slated to launch in March, the Open Value Subscription Program will allow partners and customers in the U.S. and Canada to "subscribe" to the Microsoft software they want to utilize in their businesses in a "lease-like" fashion, wrote Eric Ligman, Microsoft's senior manager of community engagement for small business in the U.S., in a Wednesday blog post.

While the Open Value Subscription Program doesn't involve an actual lease, it offers similar upfront cost benefits in terms of letting organizations pay to use software for a specific period of time, and adjust their software usage based on the growth of their businesses, according to Ligman

"At the end of the initial term, clients have the options to continue the subscription, buy out the subscription to own the licenses, or to end the subscription," wrote Ligman. Microsoft plans to hold a series of online workshops starting Jan. 10 to give partners more details on the program.

The new licensing option is part of Microsoft's small business-focused Open Value program, which is aimed at organizations with fewer than 250 seats. Open Value allows companies to manage Microsoft software licenses under a single agreement, includes Software Assurance maintenance and support, and lets VARs act as technology influencers and receive commissions, with distributors acting as aggregators that execute the licenses.

Some Microsoft channel partners see the new program as a logical progression that brings the vendor's software + services vision into clearer focus. "With the push for software-as-a-service continuing, this seems like a very natural step in the evolution of the existing licensing programs," said Dave Sobel, CEO at Evolve Technologies, Fairfax, Va.

David Schrag, principal at Schrag Consulting, a Brighton, Mass.-based Small Business Specialist, likes the idea of paying for software on an as-needed basis, but says partners could end up spending more time getting their customers to grasp the benefits of the new subscription licensing option.

"Helping a client choose between retail, OEM, Open Business, Open Value, and special company-wide options is already too time-consuming," said Schrag. "Adding subscription licensing to the mix will make the comparison that much harder, particularly if the product rights for subscription software are different from the product rights for other Open Value licenses."

One Microsoft Gold partner said the usage-based aspect of the Open Value Subscription program appears to be similar to that of Microsoft's Service Provider License Agreement (SPLA), but one big issue is whether partners will be able to maintain control over their client relationships when clients are being billed directly by Microsoft.

"It looks to me like Microsoft will have a direct relationship with this monthly subscription with the end user, where as a SPLA license has service providers dealing with their customers alone," said the source, who requested anonymity.

Microsoft's licensing policies for SMBs have traditionally been downsized versions of enterprise programs, and haven't really fit with the needs of SMBs. But this new model is "a perfect fit" for Microsoft's SMB partners, says Michael Cocanower, president of Phoenix-based solution provider ITSynergy.

"It's well known that cash is king for small business, and this really helps to enable SMBs with the software they need to be successful, made available via financial terms that are very palatable and easy for an SMB to accommodate," said Cocanower.