In 2001 Microsoft angered the IT user community when it announced a controversial new software licensing programme ending the volume licensing deals that allowed users to upgrade software on a trade-in basis.
Analysts warned that the changes could double some licensing fees, therefore increasing IT departments' budgets. Earlier this year Microsoft held out an olive branch by announcing a new "open" framework for giving companies advance warning of licensing and pricing changes.
In the first in a series of articles in Computer Weekly on the complexities of licensing, Microsoft answers questions on how to get an overview of software licensing and how to tell if an agreement is a fair one.
How can I get a holistic view of all my licences?
"Microsoft only has records of licences bought through Volume Licence agreements. Therefore, you need to record the licences you have acquired pre-installed on new PCs or through Full Packaged Product.
"Pre-installed licences need to be recorded as part of your PC purchases. You will need to check every PC for the Certificate of Authenticity (COA) label, which is stuck on the chassis of the PC, the original CDs and the accompanying documentation, as proof that it is a legal licence. If your PC is more than three years old, you will probably not have a COAlabel on the chassis of the PC, but it should be on the manual covers. You may have separate COA documents if the software is more than four or five years old.
"Full Packaged Product must also be recorded as part of your purchasing histories. For software bought in this way you have to retain your original invoice, the End User Licence agreement, the COA label found on the box top (since the release of Windows XP) or on the side of the box (for earlier products) and all the other contents of the box as proof that it is a legal licence.
"Licences acquired through any of the Microsoft Volume Licence agreements are recorded by Microsoft, and reports can be accessed through the online tools (see the "finding help" section) or by contacting your reseller."
How do I know I am getting a fair price for my software?
"You will need to compare the prices offered to you from different sources to assess if you are getting a competitive quote. Always bear in mind that if the price sounds too good to be true, it probably is."
So I can't buy directly from Microsoft?
"Microsoft is often asked to supply a price but we cannot do this as we do not sell software directly to customers. We sell through a distribution channel and our channel partners sell at a price they choose which we cannot legally influence. We strongly recommend that you get as much information as you can."
What happens when I purchase a licence with Software Assurance on an existing Volume Licence agreement?
"Software Assurance is linked to the term of your Volume Licence agreement. Software Assurance provides the rights to install the latest product releases during the term of the agreement. You can then choose to renew the Software Assurance when the agreement ends. The agreement terms differ. If you choose to buy Software Assurance within an existing Select Licence you only pay for Software Assurance for the remaining term of the agreement.
"If you buy Software Assurance within an existing Open Licence agreement, the up-front cost is two years, regardless of the remaining term. So if you buy licences with Software Assurance in an Open Licence programme, we recommend you start a new Open Licence agreement to capitalise on the two-year coverage."
Can I get a discount if an affiliated company has a licensing agreement?
"Affiliated companies may qualify for larger discounts within Volume Licence agreements. The affiliate rules can be geographically bound and you should ask your reseller to check the agreement terms and conditions.
"Finally, all Microsoft Volume Licence agreements require an underlying OEM operating system to qualify for upgrades."
For more on Microsoft licences
This was first published in April 2003