Does Microsoft complicate its licensing on purpose?

Recent comments from the company's CEO suggest the company has little interest in simplifying its licensing any time soon

It's so difficult, in fact, that many companies need help to navigate licensing Microsoft products. Both Noles and Hultquist said they use third parties to help them wade through Microsoft contracts. "I think it's overly complicated. Even the rep that we use locally has said, 'If it wasn't so complicated, I wouldn't have a job,'" Noles joked.

With more companies pondering or implementing a mix of traditional software and hosted services -- such as Microsoft's Business Productivity Online Suite, a bundle of hosted collaboration and productivity services -- Microsoft licensing is bound to get even more complex, DeGroot said.

He said that the way Microsoft's enterprise agreements (EAs), or special licensing contracts available to enterprise customers, work now, many companies are still paying for CALs for all of their internal users, even if they have switched some of them to Microsoft's hosted services.

For instance, if a company with an EA has 1,000 people using Exchange, and half are accessing the software on-premise and the other half using Microsoft's hosted Exchange service, that organization will be paying more than it should for that hybrid environment.

"You would have to buy 1,000 licenses for internal users even though only 500 people are using it, then you would buy 500 subscriptions [to the hosted service] on top of that," he said.

Microsoft is still working out how to balance this hybrid licensing, and right now offers some credit back to companies in such a case, DeGroot said. However, a company still could be paying twice for licenses if they try to mix software and services.

As Microsoft tinkers with its licensing to better accommodate these hybrid environments, Elop said it's important to keep in mind that Microsoft's reason for having a variety of licensing options is to give customers choice. While it might take them some time to figure out which provide the best fit, he said, it will ultimately be worth it.

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Elizabeth Montalbano

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