Microsoft Licensing: Why The Disconnect On Software and Cloud?

I’ve been thinking about Microsoft
licensing a lot recently.

Besides potentially giving me a headache, there’s a good
reason for this. Microsoft has a lot of licensing programs. Open License,
Enterprise Agreements, Service Provider Licensing Agreements, OEM, Retail,
Select… there are a lot of different ways to buy Microsoft.

There has been a considerable amount of partner angst over
licensing. The criticism tends towards discussions of how complicated the
licensing programs are. Rallying cries of “Too many SKUs” or “Too confusing”
from partners have dominated the discussion around licensing.

Microsoft’s answer has been that they provide different ways
for different types of customers to buy from them. The licensing is flexible to
allow for all the different ways someone could buy, and because of that, there
may be added complexity. Some partners still shook their head ruefully, but
I’ve always agreed with this statement. Licensing is complicated, because it
allows for the various kinds of customer and partner business models that
support it.

Now let’s move into Microsoft’s Cloud Offerings, and
specifically Office 365 and Windows Intune. They have one license model. The
customer buys directly from Microsoft. That’s how it’s licensed.

I’m surprised we haven’t looked at the licensing. For years,
Microsoft has told us that flexibility is the strongest way to go to market. Flexible
licensing models allow for different partners and different customers to buy
any way they want, and build business models they want. Yet cloud is different?

Why is selling cloud different from selling software so
dramatically? Is there going to only be one kind of partner business model for
cloud? Only one way of consuming it? Only one way of building solutions on it?

This isn’t a new discussion – BPOS pricing and approach was
announced two years ago, and discussed “to death” at WPC
in New Orleans. It was addressed on
stage at WPC in Washington
DC when Ballmer dismissed it with “Blah
blahblah” about billing. And here we are, approaching another WPC
with the same approach.

Either Microsoft has been wrong previously, and licensing
didn’t need to be that complicated, or they’re wrong now, and cloud licensing
needs to be as varied and diverse as on premise licensing. One-size-fits all
has not been their business model previously, and I’m surprised it’s lasted as
long as it has so far.

What’s the real story with licensing?

Dave Sobel is CEO of IT solution provider Evolve Technologies in Fairfax, Virginia, just outside of Washington DC, a managed services provider delivering solutions in the SMB space.

 

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