Microsoft is expanding its Open Value Licensing program in a way designed to make it more attractive for channel partners to sell site licenses to their SMB customers.

The program previously only offered the more expensive perpetual software licenses. But on March 3 Microsoft will announce Open Value Subscription – a new option that enables customers to buy three-year licenses, which naturally cost less, instead of perpetual licenses.

In addition, end-customers don't need to commit to a certain number of seats for the three-year term.  Rather, the number of seats is evaluated at the beginning of each subscription year. The annual subscription fee is based on that number of seats, according to Eric Ligman, Microsoft U.S. senior manager of Small Business Community Engagement.

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For an eWEEK primer on the Open Value Subscription program, click here.

That means if a company starts with 15 seats, but adds seats over the course of the year, it doesn't have to pay for the new seats until the second year of the license. And if a company downsizes over the course of the next year, at the start of the third license year it only needs to pay for the seats it is using at the beginning of the third subscription year.

Open Value Subscription also offers Software Assurance, a Microsoft program of benefits that includes the option for users to use the software license at home, upgrade protection, back up license for server software, among other protections.

Open Value Subscription also includes downgrade rights, something that retail-bought PCs don't offer, Ligman said.

Price differences between Open Value Licensing and Open Value Subscription vary according to the product. However, Ligman estimates that Open Value Subscription breaks down to about 37 percent of the license-only perpetual license cost on an annual basis.

"It's significantly lower than Open Value Licensing," Ligman said.

"This will be helpful to customers who haven't been able to adopt technology due to cash constraints and upfront cost," Ligman said. "And you don't have to worry about upgrading anymore. Customers will have access to the new version of the software if it comes out during the time they hold the license."

Ligman has been conducting 90-minute live calls with channel partners to explain the new program and answer partner questions. He has also been keeping Microsoft channel partners apprised of the ins and outs of the program at the Microsoft Small Business Community blog.