Making the right software licensing decisions requires knowledge of your organization’s buying history, its IT plans for the coming year and the alternative licensing options available from the vendor. It also requires staying up-to-date on changes to the software vendor’s licensing rules and policies. In this article, we cover recent changes in Microsoft’s popular Select licensing program and provide references to help you evaluate the impact of these changes on your company’s Microsoft licensing strategy.
The Select Plus licensing program rules have been changed to enable smaller initial purchases. Specifically, Microsoft has waived the requirement to make an initial purchase worth at least 500 points to get the minimum discount, and the change puts Select Plus on par with the closely related Select License program. Select Plus will be most valuable to customers who go on to purchase much more software and achieve greater discounts, since the discount available at the 500-point level is matched by simpler volume licensing programs with low starting requirements.
Select Volume Licensing Programs
Select License and Select Plus licensing programs are often used by midmarket and enterprise customers to purchase software in volume and offer discounts down to about 35% below retail prices. Discounts are calculated by the number of “points” each license is worth (for instance, an Office 2010 Professional Plus license earns three points, and a SQL Server 2008 R2 Enterprise per-processor license earns 200 points).
Point totals are segregated into three “pools”—Systems (desktop OS licenses), Applications (desktop applications), and Servers (primarily servers, Client Access Licenses, and hosted services)—and customers must purchase at least 500 points each year within a pool to maintain the minimum discount level, Select A, which offers 5% to 20% off retail prices. Customers who purchase at least 25,000 points in a year get the best of Select’s four discount levels, Select D, with prices about 35% off retail.
Waiving the Minimum
One of the main differences between Select and Select Plus is that the first year’s discount in Select is based on a purchase forecast, while Select Plus discounts are based on actual purchases. As a consequence of this distinction, prior to the waived minimum, Select Plus required customers to purchase 500 points in a pool before they got any discount at all. In contrast, Select allows customers to get a Select A discount with the purchase of as little as one license, as long as they purchase software worth 500 points within the first year of the agreement.
By waiving the 500 point minimum, the two programs are now on par: customers who sign a Select Plus agreement do not need to wait until they purchase 500 points to get a discount in a pool, but can start small and purchase more software later in the year.
Of course, there are other options for customers to consider. Customers who don’t plan annual purchases of enough licenses to meet the 500-point minimum will find it simpler to purchase through the Open License or Open Value programs. These programs offer approximately the same discount as Select A, but are simpler agreements to execute and are available from many more resellers.
Balancing the needs of your organization with the licensing options requires that the Software Asset Manager keep up with changes in licensing, although uncovering the right information and understanding how to apply that knowledge is a challenge. The following resources are recommended for those reviewing Select and Select Plus programs.