With all the changes we’ve recently seen in the Microsoft universe, it is amazing this idea, which has been bandied about for more than a few years, has taken this long to surface.

Originally seen as a way for Microsoft to even the revenues coming in, rather than tying the large revenues to the release cycles of Microsoft, it has led lots of businesses to become part of the Software Assurance program, which gives the customer the latest software while they pay on a continuous basis.

Now, Microsoft would like nothing better than to have all of us, large businesses, small businesses, and individuals at home, to be on a similar program, because it would make their cash situation much easier – but would it be better for us?

What the company is doing is further modifying the Software Assurance program, and reducing the time to 1 year, rather than 3, and also removing any ownership of software (as if we ever really own anything that has had the mark of Redmond on it) at the end of that year.

Steven J. Vaughan-Nichols has a few ideas on this, which are shared in a PCWord article –

While you were probably having great fun on New Year’s Eve, Microsoft was quietly making it possible for businesses to rent Windows and Office. This stealth move has the potential to make big changes in how businesses work with Office and Windows.

I would argue that Microsoft hasn’t actually let you own Windows or Office for years. On the business side, Microsoft’s volume licensing options, such as Software Assurance, require companies to pay for the right to use Windows and Office over the course of three years, which amounts to a rental program as far as I’m concerned. But with this new program, as first reported by Mary Jo Foley, business customers could “pay a flat fee to use Windows or Office 2007 (Standard or Professional versions) for a year.”

You might think that, as an individual user, you own the operating system that came on your PC — but you’d be wrong. You can’t sell the Windows that’s pre-installed on your PC. You can sell a used copy of Windows, if you bought a copy and then deleted it from your computer. So, for example, if you bought a copy of Windows 7 to upgrade from your old PC’s pre-existing Vista, you can’t sell that copy of Vista, but you can sell the copy of Windows 7. This is one of the many reasons I prefer desktop Linux.

But what does this really mean for business users? It’s complicated. First, you still need to ‘buy’ a copy of Windows or Office. If you then buy ‘rental rights, what that gives you is the right to let others users use your system. To quote Microsoft, “Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party. As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafés, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements.

These people have got you coming and going! This is clearly wrong, and should be changed. How is this different than you renting cars as Hertz or any other provider does? No one asks you to additionally license the car when you are driving; the rental agency has already done that, and that is part of what you pay for when you sign up to rent. (When I re-read this, just after first posting, I see that some may say that I am wrong, in that those cars that Hertz  rents are licensed at a higher rate. This is true, but it is not a double pay situation. It is one  fee for commercial usage, and it is not renegotiated during the term.)

“Rental Rights are a simple way for organizations to get a waiver of these licensing restrictions through a one-time license transaction valid for the term of the underlying software license or life of the PC. Solidify your role as trusted advisor by helping your customers become compliant using an additive license that fits their business model-without requiring special tools, processes, reporting, or paperwork.”

In short, Microsoft isn’t making it possible to rent its software. You still need to buy it, before you can ‘rent’ it out to other users.

Microsoft, along with others in the PC industry years ago, established these licensing restrictions, which are sweetheart deals, and bend customers over without the appropriate usage of Vaseline. It’s sad to say, but it’s most likely too late now to change things. I won’t belabor the point, but where else do you pay for something with no real assurance that it will work as it is supposed to? Windows has always been licensed this way.

On the surface, it just sounds like it’s just a way for Microsoft to squeeze more money from companies who are already letting their customers use Windows. I, for one, didn’t know that if I owned a gaming store and I let people play games on my Windows PC that I was violating my license.

I think this is more than just that though. I think this is the first step to Microsoft offering their full operating system and Office suite on the cloud.

Think about it. Companies like Zoho and Google with Google Docs and are showing that businesses are willing to use online office suites. Heck, a recent IDC survey showed that one in five businesses are already using Google Docs during the normal course of business.

The question here then, and not answered, is what happens if a machine is licensed to use Google Docs, and used in an Internet Cafe or similar location. Does that machine fall in violation of Google’s terms of service? ( I looked, and in a short search found nothing – if anyone who works for Google reads this, please comment in the area below. )

At the same time, with Windows 7 and Server 2008 R2, Microsoft is offering a new service called Secure Remote Connection. With this a user on any Windows 7 system, not just his or her office laptop, can run a corporate copy of Microsoft Office or even a complete thin-client desktop. Now, imagine, Microsoft making Microsoft Office available as a rental from Windows 2008 R2-servers based on a cloud. I think I could sell that to Microsoft corporate customers. And, if I can see it, I’m sure they can too.

Keep an eye on this new rental development folks, I think we may be seeing a new and interesting twist on how Microsoft tries to make money. And, if that puts a spoke in Google’s Internet office software wheels, well Microsoft won’t cry about that.

But if users find that Google Docs, or OpenOffice, or any other software meets their needs as well, and, in the case of paid alternatives, such as the Google Docs, the double-pay problem does not arise, how many will stop using Microsoft products?

One of the things about  Microsoft licensing is that they are always evolving, trying to get more over on the customer. Do you remember that before the mid-life of Windows XP, there was no such thing as a copy of Windows bound to only one machine? You may say that the system builder licenses of Windows allow people to get Windows at less cost, so it’s a trade off, but what that small cost difference also does is absolve Microsoft of any support to the customer, placing it on the system builder – well, if you were using this as a way to get Windows on the cheap, you have effectively shot yourself in the foot in some respects.  You have no support, you have paid almost as much as the regular software price, plus you are shafted when you want to change machine; your copy stays with the machine it was first installed on.

Just another sweetheart deal, where Microsoft give up a very little, and gains so very much – all because people did not do the small amount of reading and thinking necessary to not be taken advantage of.

Caveat emptor.


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Perhaps Windows licensing schemes are not much in the larger world – let’s hope so!

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