September 29, 2008, 9:10 PM — Starting on Wednesday, enterprises have the option to sign up for Microsoft's new Select Plus licensing program, a plan that one analyst said seems to be designed more to help the software giant than its customers.
Select Plus is similar to Microsoft's Select volume licensing program in that it lets companies combine the purchasing power of different departments to qualify for bigger volume-based discounts. Select Plus has a couple of differences but not much that will be particularly attractive to most companies, according to Paul DeGroot, an analyst at Directions on Microsoft.
For example, unlike Select, Select Plus doesn't require customers to try to estimate their annual purchases in advance in order to calculate the volume discount they will receive. That could potentially ensure more revenue for Microsoft but likely won't save enterprises much money, DeGroot said. That's because with Select, if enterprises overestimate what they'll buy, they don't have to pay Microsoft back at the end of the year for the difference between the discount they got and the lower discount they actually qualified for.
"That really bothered Microsoft, the notion that someone would ever walk away with one of Microsoft's dollars," DeGroot said.
If an enterprise underestimates the amount of software they buy, Microsoft similarly doesn't offer a refund to make up for a greater volume discount that the customer qualified for.
"My advice to customers is never to forecast low," DeGroot said.
Select Plus applies volume licensing discounts as the year progresses based on how much software a company buys, he said. While that lets Microsoft apply discounts based on actual sales, it might have some unintended consequences for enterprises.
"If you are part of a global company, you don't want to be the first guy to purchase in a given year because you get the lowest discount," DeGroot noted.
In addition, some organizations might find it difficult to predict what they'll pay for software that they intend to buy in the future because they won't know what the discount will be in the future. "It creates this uncertainty, and right now might not be the best time to create uncertainty," DeGroot said, referring to the ongoing financial crisis in the U.S.
Select Plus has a couple of other slight differences from Select. It eliminates the need for customers to sign up for the program every three years; once a customer qualifies for Select Plus, the agreement never expires.
Select Plus also gives customers the choice of buying Software Assurance, Microsoft's maintenance and upgrade program, but requires them to buy a full three-year term. Select customers can buy Software Assurance for a shorter term, but restrictions mean they could end up paying for more than they get.
Microsoft has been making changes to its licensing programs recently, but the addition of Select Plus might not be one that many customers are looking for. "For resellers, it's yet one more thing to explain to customers about Microsoft licensing which is already extraordinarily complex," said DeGroot. "I think there are some missed opportunities here, and I'm disappointed Microsoft didn't take some other chances with Select Plus."
A Microsoft spokesperson was not available to comment on Select Plus.
