Microsoft Continues Push to Refine and Simplify Licensing and Financing Programs for Customers and Partners

BOSTON, July 12, 2006 — Interpreting the details of any software licensing or software financing plan historically has been a challenging task. More and more businesses are asking that streamlined licensing programs and broad financing options are a part of the package that partners deliver. Microsoft has taken this kind of customer and partner feedback to heart by embarking on an energetic initiative to simplify its licensing and financing processes and deliver new tools that make it easier for customers and partners to do business with the company.

A sampling of improvements Microsoft has made over the last year includes reducing the number of product licensing models from 70 to 9, reducing the number of pages in its Enterprise Agreement from 241 to 44 and reducing the minimum transaction size for financing from US$10,000 to $3,000. At the Worldwide Partner Conference today, the company is again reiterating this commitment by announcing a host of licensing and financing improvements to a sold-out crowd of some 7,000 Microsoft partners.

Some of the improvements include new use rights for Software Assurance customers who want to take advantage of virtualized desktop environments, a new version of the Microsoft Product Licensing Advisor (MPLA) tool, updates to the Forrester ROI tool, the expansion of Microsoft Financing into France and Switzerland, and a “buy now and pay later” financing offering to help customers prepare for upcoming products, such as Microsoft Windows Vista and Microsoft Office 2007.

PressPass spoke with Joe Matz, recently appointed as vice president of the Worldwide Licensing and Pricing group, and Brian Madison, general manager of Microsoft Financing, to learn more about the details of the announcements and how they’ll help partners deliver People Ready businesses to customers.

PressPass: Can you provide some detail about the announcements Microsoft is making at the conference today?



Joe Matz, Microsoft Vice President, Worldwide Licensing and Pricing

Matz: We’ve worked very hard in the last year to simplify licensing and financing and make it easier for customers and partners to do business with Microsoft. At the conference today, we’re rolling out additional enhancements geared toward enhancing the customer experience. We’re introducing a new version of the MPLA tool, which helps partners and customers design configurations based on their desired products or IT solutions. We are also providing new and better-integrated product and related-product information, as well as a real-time live chat option with one of our Customer Services and Support (CSS) representatives. And we’re relaunching the Forrester SA ROI tool, in which we’ve incorporated the new Software Assurance benefits to help customers determine the potential return on investment they can achieve with our Software Assurance offering.

In addition, Microsoft is making it easier for customers to take advantage of the benefits of virtualization on both the desktop and the server. To drive innovation and support the adoption of this growing technology, Virtual PC 2004 SP1 is now available as a free download to all customers. And as part of our commitment to continue to add more value for our Software Assurance customers who deploy Windows Vista Enterprise, they will have the right to run four copies of the OS in virtual machines on the desktop. Windows Server 2003 R2 Datacenter Edition will also be available in Microsoft Volume Licensing and will enable customers to run unlimited copies of the server OS in virtual machines.

PressPass: What about the new financing developments?

Madison: Microsoft Financing, for its part, is also making a number of announcements. We’re offering a buy now/pay later promotion called “6/50″ designed to help customers acquire new products like Windows Vista and Microsoft Office 2007 that will be launched in the coming year. With this offering, customers will be able to more easily gain access to the newest software available from Microsoft by paying just $50 for each of the first six months of the financing plan, and then making 36 regular monthly payments after that.

We’re also launching a suite of financing tools to help our partners more effectively take Microsoft products to market. Some of those tools are integrated into the licensing tools Microsoft is already providing to partners. For instance, using the MPLA tool, partners can also provide monthly payment estimates to customers, so that a business decision maker can see how easy it is to afford their optimal licensing solutions.

Finally, Microsoft Financing will begin offering its services in France and Switzerland this month. This will be done through a new partner alliance with CIT Group, which will manage the transaction processing for our customers in those countries. CIT is a leading global provider of technology vendor finance, with deep expertise we hope to leverage in the European market. We expect to work with CIT globally over the next few years; France and Switzerland happen to be the first two countries we’re launching in.

PressPass: What type of functionality has been added to the new version of MPLA?

Matz: We launched the first version of Microsoft Product Licensing Advisor earlier this year, and we’ve continued to improve the tool’s functionality over the past six months by introducing subsequent versions. With this latest version, one of the primary updates is the way in which people can ask for information.

Customers or partners can now use MPLA to search out licensing options and product information for not only a particular product or set of products, but also any one of the more popular IT solutions that businesses ask for, such as CRM, when they want to configure an entire solution. So we’re providing customers a different way of walking through the simple wizard-driven interface to do some initial planning before connecting with their partners. Rather than assuming customers know exactly which products they are interested in and what those products do, the MPLA tool can now provide detailed product information about entire IT solutions so that customers can learn about the products and the various licensing options without having to know much about them beforehand.

We’re also expanding product-related information that exists in the tool to create a richer and more complete product information set to manage more complex SKUs, associated products or product add-ons. The added information will allow partners to help customers gain a more complete solution initially and a more value-added follow-up later in the process. Another enhancement in this version is that we’ve incorporated real time live chat with a Customer Service and Support (CSS) representative in the tool. So if the tool doesn’t deliver the experience or the information our customers or partners are looking for, they can also ask the question via chat.

Finally, we’re expanding the reach of MPLA by increasing its available country selection to 33 more countries and starting a phased rollout of localizing the user interface in nine new languages including French, German, Italian, Spanish, Danish, Portuguese, Portuguese (Brazil), Korean and Simplified Chinese.

PressPass: Do you think your new policy for Virtual PC will help drive virtualization on the desktop?

Matz: We know virtualization on the desktop is a technology a lot of customers want to leverage. The change in policy will make it easier for customers to experience the benefits of virtualization. Regardless whether customers’ scenarios are migration-based, deployment-based, or motivated by a desire to consolidate servers, the new licensing policy gives customers easier access to this type of technology. So we expect it will help increase adoption. And because Software Assurance customers will be able to use the technology to an even greater extent, they will be able to leverage more instances of virtualized software on their desktop and receive more value from their investment in our maintenance offering.

PressPass: How do these announcements build on the progress Microsoft Licensing and Financing has made in simplifying their programs in the last year?



Brian Madison, General Manager, Microsoft Financing

Madison: One of primary pieces of news about Microsoft Financing has been the reduction in March this year of the minimum transaction size required for financing. In dropping the level from $10,000 to $3,000 in the U.S., we had an amazing response from customers and partners. We’ll soon be making that same change in Canada and a comparable change in select European markets.

We’ve also worked very hard to implement technologies that allow us to approve credit and larger transactions more quickly. For example, we’ve installed application processing capabilities so that our partners can submit financing applications online and receive approvals in a matter of minutes. We’ve also increased our online auto-decision capabilities to handle transactions up to $250,000 with automated credit scoring. And we’ve continued to enhance other Web tools we provide our customers and partners, such as online payment calculators and proposal generation tools, as well as online sample documentation, so that customers can see documents they’d be contracting with us on.

Matz: The Licensing group also has a long list of things it has accomplished in the last year. We’ve reduced the complexity of our Enterprise Agreements so that they comprise 44 pages rather than the 214 pages they used to be. We’ve also reduced our Product Use Rights document from 104 pages to 44. In addition, we’ve reduced the number of licensing models we offer from 70 to a total of 9. And we rolled out the MPLA and Forrester ROI tools to make any complexity that remains easier to navigate.

PressPass: What kind of response have you received as a result of these changes?

Matz: We’ve had excellent feedback in the last few months regarding our efforts to simplify our licensing and financing programs. Partners tell us that in the small- to medium-size business space, the average purchase size has increased 28 percent. About 50 percent of our partners say customer purchases are happening about nine months sooner than they were a year ago. And this is happening not just with software but with some of the higher-margin services partners provide to customers. So customers have the information they need and are experiencing less pricing pressure as their affordability issues are addressed, which allows them to get the licensing solution they need today to optimize their deployments now.

PressPass: How do these announcements tie in to Microsoft’s People-Ready Business initiative?

Madison: The People-Ready Business initiative just gets back to the basics of why Microsoft provides financing in the first place. If you think about the People-Ready initiative in terms of making sure businesses are enabled with the right software to impact business performance — that’s what Microsoft Financing does everyday. Businesses of all sizes want flexibility and choice related to how they acquire their software, hardware, and services; and ultimately it is our job to help them optimize the software solutions they need. Microsoft Financing enables them to get the optimal solution they need today and pay for it over time, so their people get the best solution possible for added productivity.

PressPass: What strategies will Microsoft adopt moving forward for Volume Licensing and Microsoft Financing?

Matz: We will continue to make significant investments in our licensing infrastructure to simplify licensing and better respond to our customer and channel partner needs. Many of our efforts will be focused on providing an improved set of self-service tools and technology that can be used by both customers and partners.

Madison: Like Volume Licensing, Microsoft Financing will continue to build out the suite of tools we currently have available. We look forward to more deeply integrating financing technologies with Microsoft volume licensing offers. For example, with Select, a volume-licensing program for medium-size and large organizations, we’re piloting a program in 2007 in which all Select offers will also have a financing offer attached to them. The pilot will be run in Canada, and we are implementing a similar program for our Enterprise Agreements. We’ll also be continuing to expand our reach. We’re in 13 markets today, counting France and Switzerland, and we’re looking to expand into three-to-five new markets in the coming year. Microsoft Financing is ultimately targeting being in the top 20 Microsoft markets worldwide by the end of 2008.

One Partner Speaks Out About Software Assurance Benefits

As Microsoft continues to add value to its Software Assurance program by including new use rights for virtualized desktop environments and eight new SA benefits, customers are looking to partners to help them understand the benefits of the program.IDC has published three case studies this month that detail the value Microsoft customers are realizing with Software Assurance. One of these case studies profiles a Microsoft partner, Dimension Data, a South Africa-based IT solutions provider, and outlines the benefits that the company has been able to deliver to its customers through Microsoft Desktop Deployment Planning Services (DDPS), an enhancement added to Software Assurance earlier this year.With DDPS, Microsoft Select and Enterprise customers are entitled to one to 15 days of deployment planning services, based on their Software Assurance investment in Microsoft Office software. DDPS introduces the most advanced techniques, processes and tools and provide individualized services based on each company’s unique needs to help it achieve the most cost-effective desktop environment.

Curt Wheadon, global vice president of Operating Environments and Messaging at Dimension Data, says that with DDPS, “Deployment is automated, where we can do 600 desktops in one WAN segment in one hour, which is something that was unheard of a few years ago.”

To read about the rest of Dimension Data’s and others’ experiences with Software Assurance, visit www.microsoft.com/licensing.