Microsoft considers three-year licences

Microsoft could soon be billing users every three years for software use, if an analyst's predictions about the software giant's...

Microsoft could soon be billing users every three years for software use, if an analyst's predictions about the software giant's plans to change licensing practices are proved correct.

Currently, large companies purchase software from Microsoft on a per-user basis under three-year "enterprise agreements". Once the company has paid the full amount the software is theirs to keep.

Under the new plan, companies would continue to contract these agreements for three years, but at the end of the period would either have to pay again, or stop using the software.

The change would move Microsoft software buyers from a "perpetual" licence to one that is fixed for a certain period of time.

In a research note, UBS Warburg analyst Don Young said that the many global clients of UBS had confirmed that Microsoft was "proposing new enterprise agreements that provide a limited three-year software licence, unlike the prior perpetual licence proposal". Young expects that all site licences will eventually become fixed-term.

A Microsoft spokeswoman refused to comment on the analyst's specific suggestions but admitted that the company was looking at changing licences.

"There will be some announcements coming out soon, but we have no comment at the moment," she said.

Daniel Thomas
daniel.thomas@rbi.co.uk

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