Microsoft scrambles to simplify its licensing

The effort to streamline licensing is incomplete

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Microsoft has to make its licensing truly simple and straightforward, "without asterisks," in the way Google licenses its Apps suite, Johnson said.

His advice to CIOs is to not tolerate complexity. "Don't sign the licensing agreement if you don't thoroughly understand it and aren't convinced that it is the best solution."

Get help from experienced, unbiased consultants, listen to advice from peers and start the process early if you're facing the renewal of an existing agreement, he said. "If you're under the gun in terms of time, you're at a disadvantage."

Why is Microsoft licensing so complex?

There are a number of reasons why understanding Microsoft licensing is difficult.

For starters, the company has a lot of products for businesses, including operating systems for smartphones, tablets, PCs and servers; productivity, CRM (customer relationship management) and collaboration applications and servers; databases, systems management tools and application development suites.

On top of all of these software products, Microsoft is growing its line of hardware devices for businesses, starting with the Surface tablets, continuing with the Nokia smartphones it's in the process of acquiring, and adding to it in the future with new devices it plans to build.

"The footprint of Microsoft products tends to extend throughout the enterprise, so the scale adds to the complexity," IDC's Konary said.

To make matters worse, licensing isn't uniform across that enormous arsenal of products, so just because a CIO or IT manager figured out how one product is sold and how and by whom it can be used doesn't mean that they can extrapolate that knowledge to a similar product. In fact, it's common even for editions of the same product to be licensed differently, as happened with SQL Server, whose 2008 edition was licensed by server processor and whose 2012 edition is licensed by the number of cores in each server processor.

"One of the big problems they've had in the past is that different product groups have worked in isolation without coordinating with each other," Forrester's Jones said. "They need more consistency in the licensing policies across products."

Throw in a bit of virtualization, add a tad of cloud computing -- which creates hybrid environments -- and mix in smartphones and tablets owned by employees, and suddenly figuring out Microsoft licensing can become a nightmare.

"Where Microsoft is really struggling is with the definition of 'device,'" Jones said. Not too many years ago, this was straightforward, because end-user devices were primarily desktop and laptop PCs, and each one had its own instance of Windows.

But with the mobile boom and its resulting BYOD (bring-your-own-device) trend, as well as with the popularity of virtualized desktops, things got confusing.

Then there is Microsoft's apparent preference to err on the side of giving customers flexibility by providing many licensing options and product bundle variations, and risking creating confusion, as opposed to siding with more of a one-size-fits-all approach, which is simpler but can be frustrating in its rigidity.

"Flexibility and simplicity are diametrically opposed forces in the software industry," Konary said. "Vendors are always trying to balance them."

Take the Office 365 family of cloud-hosted and subscription-based productivity and collaboration applications and servers. The Office 365 suite for businesses, government agencies, schools and nonprofits encompasses more than 20 different editions, with different prices and component configurations.

And there's the lineup of the traditional on-premises equivalents of those products, which increasingly people are mixing and matching with Office 365, creating "hybrid" deployments of locally installed and Microsoft-hosted software, and the corresponding trail of licensing rules and terms, with their variations, requirements, exceptions and caveats.

Office 365 competes against Google Apps, which in terms of licensing and bundling options is the polar opposite -- a study in simplicity and clarity.

It's not a coincidence that there are many independent professionals, boutique firms and teams within larger partner and reseller companies that specialize in helping businesses understand their Microsoft licensing needs and options so that they don't overpay for and under-use the products they buy.

"Involving the experts is a good investment," Jones said.

Jones isn't convinced that the MPSA will remediate enough of these issues to truly transform Microsoft licensing and make it drastically simpler.

"There will still be the complexity of different product teams inventing their own ways to handle common problems and using similar terms to mean different things from each other," he said. "And they'll still be propping up obsolete concepts such as 'qualifying device' with complex rules trying vainly to cover every conceivable situation."

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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