Microsoft's new 'Select Plus' a better software license for businesses?

The devil's in the details, as the devil tends to be

Microsoft Corp. on Tuesday announced a new volume software license that it says will be easier for corporate customers to manage and may even save them some money.

Select Plus is a variant of Microsoft's existing Select license and will be available in the fall.

Select Plus will allow companies to more easily aggregate all their purchases, whether made by central IT, a small department or an overseas office, into a single account so they can maximize their volume discounts, according to Chris Blackley, a director for enterprise programs in the worldwide licensing and pricing team at Microsoft.

Select Plus, which will complement but not replace Select, can also be set up as a perpetual contract, removing the need for companies to engage in extensive renegotiation with Microsoft and internal legal and financial review, he said.

Select Plus will also cost the same as Select, a popular option for companies that don't want to pay for a pricier enterprise agreement.

Select, "while requiring more managerial overhead, speaks well to the crowd that prefers to pay a little more for what it actually does consume rather than being seduced into paying a seemingly lower per unit fee only to actually pay for stuff they don't need or won't be using," wrote Scott D. Rosenberg, CEO of Miro Consulting Inc., a Fords, N.J.-based software license consulting firm, in an e-mail. He called Select Plus a "marginally better plan" than Select because "there's less managerial overhead involved, and how can that be anything but good to the time hurried IT executive?"

Others may find a restriction in how Select Plus customers can add on the optional Software Assurance maintenance program less appealing.

SA's main benefit is that it guarantees purchasers the next version of the Microsoft software in question if their license is still valid by the time it is released; the program essentially doubles the cost of licensing software.

While a requirement of EA contracts, SA remains an option for Select Plus customers. But Select Plus customers who want SA must buy it upfront for the entire three-year term of their contract, just as EA customers must.

With Select, users must still decide upfront whether or not they want SA. But Microsoft has more restrictions surrounding SA for Select customers. For instance, the length of an SA contract is always rounded up to the nearest year. Thus, a Select customer in the 23rd month of a 36-month agreement must still buy a full two years (24 months), even if they only need 13 more months of coverage. Moreover, the "left-over" 11 months cannot be applied to a subsequent Select contract.

Forcing Select Plus customers to pay for three whole years of SA is "not just us trying to figure out how to get more SA sold," Blackley claimed, citing feedback from more than 600 Microsoft customers showing that 15% more preferred the new pricing scheme.

But Paul DeGroot, an analyst at the independent firm, Directions on Microsoft, thinks Select Plus' restrictions will discourage customers from getting SA because "it removes flexibility in some places" and will thus make it a pricier option for some.

Select Plus remains "a good option for large, multisite or multiaffiliate customers who like centralized management of their licensing while giving local affiliates freedom to purchase as needed," wrote DeGroot. But "it's unfortunate that Microsoft didn't make Select better -- and while it's not a bad plan, there are some very obvious ways to improve it) -- rather than coming up with a new, quite complex volume licensing plan."

Rosenberg, meanwhile, said that while Select Plus' terms around SA remove a "managerial worry ... the caveat here is that this can breed complacency and that will cost you in the longer run."

Select Plus customers won't need to install inventory software agents on their machines or send reports back to Microsoft and partners on how much software they are running, Microsoft's Blackley said.

He said there is no relationship with Microsoft's controversial Software Asset Management program, which has been criticized as a heavy-handed attempt to detect companies running more software than they have paid for, and force them to "true up" by buying more.

Copyright © 2008 IDG Communications, Inc.

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