The Small Business Desktop Advantage is neither a desktop nor an advantage. Discuss. And Discuss. And Discuss.

The Small Business Desktop Advantage is neither a desktop nor an advantage. Discuss. And Discuss. And Discuss.

Warning: This is long. Really long. Like 17,000+ words / 30+ pages long. You might not be able to take it all in one sitting. But I thought it was important to consolidate a lot of information into a single post.

Microsoft has a relatively new software bundle that they’re pushing hard. It’s called the Small Business Desktop Advantage, or SBDA. (That’s the current name, anyway. When it was rolled out a year ago, it was called the Small Business Platform SKU.) This bundle includes three components: a full license to Office Small Business 2007, a license upgrade to Windows Vista Business or Enterprise, and a client license for Small Business Server 2003. It also includes three years of Software Assurance, which provides additional benefits including future version upgrades, home use rights for Office, training CDs, and more. The estimated retail price is $922.00, with a street price a little lower. You can pay for it all at once or in three annual installments with zero interest.

Microsoft must see huge profit potential in this bundle, because as I said, they are promoting the hell out of it. They’ve built cute customer-facing web sites like LessThanFries.com and LessThanCoffee.com. They have weekly webcasts for partners like me to educate us about how to sell it. There is a special incentive for us Small Business Specialists: for every one of these licenses I sell to my customers, I get a 5% – 10% rebate. This bonus has just been extended through the end of June 2007.

The SBDA is a good choice for some businesses. In certain circumstances, it can be easier and less expensive than acquiring the equivalent licenses through other purchasing methods. But for me, the operative words are are “some businesses” and “certain circumstances.” In some cases, SBDA would cost between two and three times what they would pay to get satisfactory functionality through alternative license programs. Hmm, now I see the profit potential.

I anticipate a bigger and bigger push of SBDA during 2007, and I feel compelled to offer a “fair and balanced” perspective. It may be rather stupid of me to do this. In doing so, I am biting the hand that feeds me, if not chomping off everything up to the elbow. I need Microsoft a lot more than they need me. So why antagonize them like this? I suppose it’s because, as Tom Cruise famously said in A Few Good Men, “I want the truth.”

If I were a reputable journalist or analyst, I would make my case in the traditional way, by giving you some background information followed by a carefully constructed explication of the pros and cons of SBDA. But I’m a blogger now, so what I do is cut and paste. I’m going to reproduce here some of the conversations that I and others have had with Eric Ligman, the man who embodies Microsoft’s small business sales efforts in the United States. I have some mixed feelings about doing this. None of what I am about to print here is from private e-mail communication, but it’s not exactly public information, either. What you see here are excerpts from moderated Yahoo groups, which are sort of semi-public space. These messages were certainly not meant for consumption by the “end user” community — i.e., the small business owner — but as they say, if you aren’t comfortable reading something on the front page of the New York Times, then don’t put it in an e-mail. And since Vlad Mazek recently posted excerpts from the Yahoo groups with no immediate backlash, at least I can say I’m not the first to do this. I don’t think I’m revealing any trade secrets or betraying any trust. Microsoft’s exhortations to its partners-in-sales are available for all to see. And if I appear to be ridiculing some of the comments made here, I can only say that some of my own comments will probably seem ridiculous as well.

The dialogue here is color coded. My comments are in blue, Microsoft’s comments are in green, and comments from other contributors are in purple. This will give you an under-the-hood look at what’s involved in buying SBDA. They’re presented in chronological order, starting last spring just after the new bundle’s release.

Issue 1: $28 for an SBS CAL + Win XP Pro Upgrade + 3 years of Software Assurance (May 2006)

[This conversation was started by a blog post from Eric at Microsoft, reproduced here in its entirety.]

Tick, tock… $28 gets you an SBS CAL + a Windows XP Professional Upgrade + 3 Years of Software Assurance benefits for each when you purchase Office Small Business Edition through Open Value by June 30th!!!

That’s right. Imagine getting a Windows XP Professional Upgrade PLUS an Small Business Server Client Access License PLUS three years of Software Assurance benefits on both of these (this includes 3 years of upgrade protection, which will get you the Windows Vista Upgrade!, along with eLearning, etc.) for just $28! If you are looking to purchase Microsoft Office Small Business Edition between now and June 30, 2006, you can. Here’s how this works:

The ERP (Estimated Retail Price) of Microsoft Small Business Edition with 3 years of Software Assurance purchased through Open Value is $769.00. This would get you the Microsoft Office 2003 Small Business Edition License, 3 years of upgrade protection (which would get you Microsoft Office 2007!), 3 years of eLearning courses to help you get the most from your Microsoft Office products, 3 years of Microsoft Office Home Use Rights which would allow an employee to use Microsoft Office Professional on a home PC for no additional cost, plus 3 years of all of the other Software Assurance benefits.

So if you take the $769 ERP and add the $28 I mention in this offer, you have a total of $797 ERP to get Microsoft Office Small Business Edition, Microsoft Windows XP Professional Upgrade, Microsoft Small Business Server Client Access License and 3 years of Software Assurance for each. Anyone know of a license from Microsoft that includes Microsoft Office Small Business Edition, Windows XP Professional Upgrade, and an SBS CAL with 3 years of Software Assurance benefits? That’s right, the Small Business Platform SKU!

The ERP on the Small Business Platform SKU is $922, which is a little more than $28 higher than the $769 ERP on Office Small Business Edition, so how do we make this work? Simple! Use the offers we have in market right now, like the Microsoft Office Rebate. So if you take the $922 ERP of the Small Business Platform License (B6K-00052 or B6K-00050 if using Microsoft Small Business Financing) and subtract the $125 rebate you qualify for with each Microsoft Small Business Platform License, you have an ERP of $797. That’s only $28 more than the ERP of Microsoft Office Small Business Edition by itself; however, you get all three for this price! Plus, remember that we are currently offering a FREE Pocket PC Phone for each Small Business Platform Agreement purchased by a company with 25 PCs or less!

One note, remember that the Small Business Platform License is a company-wide Agreement, so you would have to purchase one Small Business Platform SKU (B6K-00052 or B6K-00050 if using Microsoft Small Business Financing) for every PC in the company. By doing so, you would also receive additional Software Assurance benefits such as an Employee Purchase Program (which allows your employees to purchase Microsoft software for up to 30% off!) and Corporate Error Reporting.

By the way, we have been receiving some GREAT success stories from Partners regarding their successes with the Small Business Platform offer, including exciting feedback from their customers on what it has done for their companies. If you have a success story, let us know as we are looking to highlight some of these in the upcoming future!

For those of you reading the blog, make sure you read it closely. The key sentence in Eric’s post is “remember that the Small Business Platform License is a company-wide Agreement, so you would have to purchase one Small Business Platform SKU … for every PC in the company.”

So the $28 Eric is talking about is really just a part of a minimum purchase of $3,985 for a 5-user organization, $7,970 for a 10-user organization, and so on. But if most of your users already have XP, Office, and an SBS CAL, the price drops to … wait a minute, the price doesn’t drop at all.

The Small Business Platform SKU might make sense for a very well capitalized (or daring) brand new business, or a company that has spent approximately $0 on tech upgrades over the last three years, but I just don’t see it as a mainstream product.

Now, David… Did you read the post headline listed in extra large font for everyone to see? It clearly states, “Tick, tock… $28 gets you an SBS CAL + a Windows XP Professional Upgrade + 3 Years of Software Assurance benefits for each when you purchase Office Small Business Edition through Open Value by June 30th!!!” So the $28 incremental cost for an SBS CAL, Windows XP Pro upgrade and 3 years of Software Assurance is just that, $28 incremental when you purchase Office Small Business Edition through Open Value by June 30th.

So in the example you provided below, if a (5) PC company were to purchase (5) Office Small Business Edition licenses through Open Value, the ERP of that purchase would be $3,845 (calculated at 5 X $769 = $3,845). The $769 ERP of the Microsoft Office Small Business Edition License + Software Assurance through Open Value is clearly called out in the second paragraph of the Blog post. So according to the title of my post and the info I posted, you should be able to get an SBS CAL, a Windows XP Pro Upgrade, and 3 years of Software Assurance for those on all (5) of those PCs for an additional $140 (5 X $28 = $140).

Now let’s check my math:

– (5) Small Business Platform SKUs ERP = $4,610 ($922 X 5 = $4,610)

– Total rebate you would be eligible for based on this purchase through the Office Rebate = $625 ($125 X 5 = $625)

– $4,610 (Total ERP) – $625 (Total Rebate) = $3,985.

– $3,985 (Total cost we just calculated) – $3,845 (ERP of the 5 Office Small Business Edition licenses purchased through Open Value) = $140.

Unless I missed something, the math does seem to fully support the exact statement I made in my Blog post with no hidden agendas, tricks, funhouse mirrors, etc. It truly does work out to a mere $28 difference to get from just Office Small Business Edition to the full Small Business Platform SKU which includes Office Small Business Edition, an SBS CAL, a Windows XP Pro Upgrade, and 3 years of Software Assurance for each of these components.

As for your closing statement of, “The Small Business Platform SKU might make sense for a very well capitalized (or daring) brand new business, or a company that has spent approximately $0 on tech upgrades over the last three years,” there are already customers and Partners all across the US utilizing the Small Business Platform SKU ranging from new companies, to companies that have been in business for years. From companies with 4 PCs (they bought 5 Platform SKU licenses since it saved them money over buying independent licenses for the 4 PCs and allowed for the easy addition of a 5th PC next year) to companies with 50+ PCs.

These include companies with new technology, old technology, and those with a mix. So while you, “just don’t see it as a mainstream product,” maybe some of the Partners on this list that have been having these successes with the Small Business Platform SKU can share with you how they have done so. In addition, we will be sharing some of these stories on the SBSC website in the future.

In regards to your question of, “But if most of your users already have XP, Office, and an SBS CAL, the price drops to …” let’s say that you did already have Windows XP and an SBS CAL. Since the SB Platform SKU includes 3 years of Software Assurance, you would get not only the Office Small Business 2003 Edition license, you would also receive an upgrade to Office 2007 Small Business Edition, Windows Vista Enterprise upgrade and any other upgrades released for these three products over the next three years. In addition, you would also receive an Office Pro license for home use for each PC, eLearning courses, an employee purchase program, Corporate error reporting, and the rest of the Software Assurance benefits for 3 years. If you can find another option that provides all of these for less than $28, please let me know what it is. The ERP on a single Windows XP Pro Upgrade alone is $199, which would cover the $28 difference for (7) PCs all by itself and the value of a single Windows upgrade vs. the 7 Windows Upgrades with SA, SBS CALs with SA and additional benefits of the SB Platform SKU, well, I’ll let others choose which they think provides more value and savings.

To summarize, my post was made directly at face value and is based strictly on the $28 difference between the cost of the Office Small Business License through Open Value and the Small Business Platform SKU, not as part of some other pretense, which is why I called it out in the title of the post itself. I hope this message helps clarify this for all. For those who wish to read the Blog post itself, you can do so at: http://blogs.msdn.com/mssmallbiz

Your math is not wrong, and I never said it was. My point was that your headline goes out of its way to showcase the Small Business Platform SKU as some sort of low-cost, no-brainer add-on, when in fact any company that buys it is going to be laying out a lot of money and, except in what I believe to be unusual circumstances, they will be be paying for some software they already own.

For example, let’s take that 5-person company. Ooh, boy, they get 5 SBS CALs as part of their Platform SKU. Well guess what — if they already own SBS, then they already own those first 5 SBS CALs, too! And since the Platform SKU has to be company-wide, there is no way to “transfer” the 5 CALs that come with SBS to any other users or devices in the company. So the SBS CAL portion of the first 5 Platform SKUs is worth exactly $0.00.

As for the desktop OS, any PC that is not already running XP SP2 will almost certainly not be Vista-capable, and many of the PCs that ARE running XP will probably need replacing, too. You won’t be able to buy a new PC without an OS, so the value of the OS SA may not live up to the buyer’s expectations.

I do look forward to hearing some real-world stories of when the Platform SKU makes sense. In the meantime, I don’t blame you for trying to hype your software products. That is what you get paid for, after all. But don’t expect the community to let your sales puffery go unchallenged.

[A few others in the group chimed in with their own questions and comments, which are summarized in Eric’s next message.]

Ok, let’s see if we can address several of the questions posted here in one reply…

1) Simplify

a. The extended length of my reply was to address each of David’s points individually. The “what if” scenarios were raised by David, so I was looking to address each. I would suggest the complexity and “what if’s” came about due to the lack of simplicity that currently exists based on the one-off licensing decisions that are made today, thus creating environments filled with a hodge-podge of different versions, channels (OEM, Retail Box, Upgrade, non-upgrade), etc. This leads to questions like David’s of, “What if I have a few of these?” or “What if we have X # on this version and X # on that version?” That is where the complexity comes from.

b. The Small Business Platform license is designed to provide simplicity and eliminate the “What if’s” and “How do I” type situations.

Licensing with the Small Business Platform license is as straight forward as counting how many PCs there are in the company. You purchase one Small Business Platform License per PC and you are done. No “What if’s,” no “How about’s,” just one per PC. Moving forward, every PC in the company now has the rights to the most current version of Windows desktop O/S, Office Small Business Edition, and SBS CAL, along with the option to use a prior version if they choose to or if their current hardware does not support the most current today (OEM and Retail don’t provide this option). When new versions are released, what do they need to do to get the rights to the newest version? Nothing. That’s included in the Platform License. (Not included in OEM or Retail) What do they need to do to keep track of their licenses? Nothing. That’s included in the Platform License. (Not for OEM or Retail where the client must keep track of all proof of ownership items. If they lose them, they no longer own the rights to use the software) Plus, they have full transfer rights on the licenses, so they can transfer the Office SBE license and SBS CAL to a new PC if one is replaced along with the Windows Upgrade and all Software Assurance benefits. (No so for OEM where there are no transfer rights) The only thing you would need on the new PC would be a full desktop O/S since full Windows licenses are not available through any Volume Licensing Program. (Applies to OEM as well)

2) “Also if the consultants make an assumption based on the “title” then you loose 1/2 and you tick off a handful because of their disappointment.”

a. Any consultant who reads a headline only and goes out and starts making recommendations without reading what the headline is about and understanding the context has bigger issues than the Platform License.

3) “They already are not keen on marketing spins, I am curious as to why marketing spins are used with this audience?”

a. The irony is, my post is not intended as “marketing spin.” One of the top questions I have received about the Platform License is how to position it or introduce it from a positioning standpoint for someone looking at just one or two of the components vs. buying all three. My post positions the question of, “If you could get the full platform offer for only $28 more than just Office SBE alone, wouldn’t that be of interest? If so, here’s how…” If you perceive that as “marketing spin,” so be it. I have generally found that “marketing spin” is not followed by a step-by-step layout of how the offer works, where the #s came from, etc. as I provided in my post. Generally it is the headline only and then type 2 font hidden somewhere stating the offer really does not exist. The information in my post exists today for any company with 4 – 75 PCs. Buy one Platform License per PC in your company and you will receive the entire Platform License for just $28 more than Office SBE through Open Value today through June 30, 2006, period. No catches, no type 2 font, nothing.

4) “I went to check Eric’s math and couldn’t find Office2003SBE retailing for anywhere near his 795$ ERP. It’s usually far less than and often only half of what he’s using in his math. That cited 28$ should be 400$. Of course, that’s retail / FRP, not open *value*..”

a. Well, I couldn’t find where I referenced the $795 ERP of Office Small Business Edition, so I will guess you are referring to the following statement from my Blog post, “The ERP (Estimated Retail Price) of Microsoft Small Business Edition with 3 years of Software Assurance purchased through Open Value is $769.00.”

b. Now, I thought I was being pretty specific with my description of what I was using for pricing and where you would find it by calling out that it is Office Small Business Edition with 3 years of Software Assurance purchased through Open Value; however, if that is causing ambiguity, here is the specific Part # you can reference when you check with your Distributors: W87-00360

c. In your reply, you are comparing a Retail Box license of Office SBE to an Open Value license of Office SBE with 3 years of SA? They are not even close to being the same items… You can take a look at the “Get Office for Less!” document in the Shared Documents section of the http://www.mssmallbiz.com <http://www.mssmallbiz.com/> site to see a quick comparison of what you get with Retail Box vs. the Open Value offerings. The only difference between the Office Pro used in the “Get Office For Less!” document and Office SBE is the removal of the “Enterprise Edition” and “InfoPath 2003” lines for both. So if you buy Retail SBE today, do you get Office 2007 when it comes out? No. If you buy the Open Value Office SBE, do you get Office 2007 when it comes out? Yes. What about if you want to run Office at home? If you buy Retail Box Office, do you get to run Office at home? No. If you buy the Open Value Office SBE, do you get to? Yes, you get Office Pro Home Use Rights (and an upgrade to Office 2007 for your Home Use Rights of Office under Open Value as well!) If you buy Retail Box Office, do you receive any eLearning to help the employees at the client site learn how to use Office 2003 and 2007 more efficiently? No. If you buy the Open Value Office SBE, do you get it? Yes, you do. If you buy Retail Box Office, do you get any form of license protection? No. If you lose your paper license, it is gone and you own nothing. If you buy the Open Value Office SBE, do you get license protection? Yes you do. Your license is electronic and cannot be lost. A little peace of mind for your clients.

If you buy Retail Box Office SBE, how do you get to Pro if you decide you need it? You buy an upgrade that costs how much??? If you buy the Open Value Office SBE, you can “Step-Up” to Pro for only $86 which includes all Software Assurance benefits (unlike Retail Box). If you do upgrade the Retail Office SBE to Pro, do you get the Enterprise Edition with InfoPath? No. If you buy the Open Value Office SBE and “Step-Up” to Office Pro, do you get the Enterprise Edition with InfoPath? Yes, you do. So as you can see, the Office SBE Retail Box you used in your example provides nothing close to the Office SBE Open Value I used in my example.

5) “For example, let’s take that 5-person company. Ooh, boy, they get 5 SBS CALs as part of their Platform SKU. Well guess what — if they already own SBS, then they already own those first 5 SBS CALs, too! And since the Platform SKU has to be company-wide, there is no way to “transfer” the 5 CALs that come with SBS to any other users or devices in the company. So the SBS CAL portion of the first 5 Platform SKUs is worth exactly $0.00.”

a. Let’s see… The Small Business Platform Offer comes with the Office SBE, Windows XP Pro Upgrade, and the SBS CAL with 3 years of SA for each. I’ve already shown that the ERP of the Office SBE Open Value license is $769, so you are getting BOTH the Windows XP Pro Upgrade AND the SBS CAL with 3 years of SA each for $28 TOTAL. So even if we say the SBS CALs are a complete wash at $0 each, can you find a Windows Pro Upgrade with 3 years of SA for less than $28 somewhere else? If not, then you’re still saving money with the Platform Offer. Also, your example is limited to only the first 5 users. Anyone on this list have customers with more than 5 PCs? If so, each additional one beyond that first 5 would just be even more additional savings since the price of the Platform offer does not go up after the initial 5.

6) “I do look forward to hearing some real-world stories of when the Platform SKU makes sense.”

a. Here is a link to existing Partner Case Studies on Open Value (including some on the SB Platform Offer): https://partner.microsoft.com/global/40021877. One in particular I would recommend is VantagePoint Partners who is based out of the Midwest. They are a services provider that now uses Open Value for their customers based on the value their customers tell them they receive from it. We will also be creating several more items like these specifically focused on the SB Platform license moving forward.

7) “IMO Licensing is broken, is overly complex and Microsoft aren’t going to do anything about it in the short term.”

a. Simplification of licensing is a specific goal of the SmallBusiness Platform License. One license per PC allows standardization and adoption of current and future technology at the clients chosen pace instead of as hardware is refreshed or on one-offs, etc. After the initial three years with the Small Business Platform License, the client can simply renew just the SA portion of the license (no need to buy the license again) and receive an additional three years of standardization, upgrade protection, license protection, SA benefits, etc. As additional PCs are added to the company, simply add one SB Platform License to each additional PC and you’re good to go. Also, by providing the additional rights and benefits of the Open Value Program and Software Assurance benefits at the 28% discount offered through the SB Platform License, this is a goal of the license.

Ok, I think this reply is long enough and hits on what the main points the replies so far have been. Make no mistake, I in no way expect anything I say to go unchallenged. If everything went unchallenged, I would know that I was in this group alone. 🙂

Adding a bundled license package to an existing array of licenses without making any changes to the existing array does not simplify things, no matter how simple the bundle itself is. It only complicates matters further because there is one more product to compare and contrast. You are essentially saying to the market “if you think MS licensing is too complicated, all you have to do is buy our most expensive package and then you don’t have to worry about it any more.”

We can argue on and on about whether the SA benefits like home use rights and eLearning justify the extra cost, but paying MS a premium price to get rid of a situation that MS created in the first place is not going to sit well with your customers.

The platform SKU is not a bad idea. I do have customers that would love to standardize and would like to know that they had a comprehensive license for each machine. The real sticking point is that there is no good way to get there without writing off all the purchases they have made so far as a sunk cost.

If you want lots of small businesses to move to the platform SKU, here’s how to do it. Assign a point value to every product that the platform SKU is supposed to replace. For example, Windows 98 might be 50 points, Windows 2000 75 points, and Windows XP Pro 100 points. Office Pro 97 through XP might be 125 points, Office Pro 2003 200 points, Office Basic 50 points. An SBS CAL might be 50 points, too. An existing SA agreement on any product would count for some points, too. I don’t know what the right numbers are, but you get the idea. Now have your customers total up all the points for products they already legally own, including OEM software. Finally, allow the customers to upgrade to the platform SKU by subtracting their point total from the total dollar amount of the SKU purchase.

This is a win-win-win. Customers win because they finally have standardization throughout their company and they no longer need to wonder about how they’re going to do their software purchases from now on. Microsoft wins because they get a big cash influx now from all the people who have been putting off software upgrades until they can get OEM software with a new hardware purchase. Microsoft also gets predictable recurring revenue, because most of the purchasers of the platform SKU are going to keep renewing their SA agreements forever so they can stay current with version upgrades. Resellers win because once they are able to convert their customers to the platform SKU, they spend a lot less time calculating the various costs of dozens of potential licensing arrangements.

This plan is not perfect. There are still going to be some howls from people who already own the platform SKU and can’t understand why they have to buy the desktop OS again every time they buy a new PC. But that’s a fight for another day.

I understand the premise you are trying to establish; however, does the following really sound like a way to make things easier?

“Assign a point value to every product that the platform SKU is supposed to replace. For example, Windows 98 might be 50 points, Windows 2000 75 points, and Windows XP Pro 100 points. Office Pro 97 through XP might be 125 points, Office Pro 2003 200 points, Office Basic 50 points. An SBS CAL might be 50 points, too. An existing SA agreement on any product would count for some points, too. I don’t know what the right numbers are, but you get the idea. Now have your customers total up all the points for products they already legally own, including OEM software. Finally, allow the customers to upgrade to the platform SKU by subtracting their point total from the total dollar amount of the SKU purchase.”

Let’s be honest, if I had been the one to post the idea of assigning differing point values for various software programs that a customer LEGALLY owns and having them count up the point values (not to mention how do you ensure legitimacy of the totals) and then subtract that number from another number to ultimately determine what the price they are going to pay for a different offer, everyone on this list would be on the “Here goes Microsoft making it is soooooo complicated bandwagon.” Remember, I was told I was making it too complicated by simply explaining how the rebate worked in my Blog post and that had nothing to do with points, varying products, proof of ownership, etc… 🙂

[The next comment is from a software distributor, who buys product from Microsoft and sells it to people like me. I’ve disguised his identity so as to neither embarrass nor promote his company.]

One other option that is not looked at here is seeking assistance with your licensing questions and opportunities. Everyone that I’ve met from this group is a bona-fide expert at one aspect or another of selling/installing/administering Microsoft-based networks, but no one is an expert at all of them. When you run into something that you don’t know or understand, you ask someone else from the group (or many someones) for direction and assistance. I’d like to offer some licensing assistance, if I may, on behalf of [my company].

The Small Business SKU *is* a great value…in the short term for some customers; in the long term for all. Sometimes the issue is getting it to make sense in the short term, to get to the long term solution.

If your customer is currently running a network that is standardized across the board on Windows XP Pro, Office 2003 and Small Business Server, then there is no value, right here, today, in the upgrade aspect of the SKU. **There will be within the next six months**.

There are all sorts of other SA advantages to focus on: eLearning, Home Use Rights, Employee Purchase Program and the TechNet subscription are the first that come to mind. No marketing spin, any or all of these offer their own value; if your customer wants to offer a free copy of Office to their employees as a benefit of employment, what would that cost them? What does training on the finer points of any given Office application cost? I haven’t found it for free. Sure this isn’t “free”, but it’s part of the huge value that SA can be, if it is positioned properly.

Now, I’m betting that many of your customers have those some PIII/P4 machines running 98SE or Win2K or (heaven forbid) Win Me. Most of those machines will run Win XP Pro just fine, as long as some more memory is stuck in them. The prospect of Vista is causing some angst, but, contrary to popular belief, the basic requirements for running Vista are pretty low: 800 MHz or better CPU, at least 512MB of RAM, and a DirectX 9-capable video processor. 512MB of PC133 RAM is around $65, reseller cost (DDR is slightly cheaper), and there are a plethora of DirectX 9-capable video cards, both AGP and PCI, available for around $55, reseller cost. So, for Eric’s $28 and another $120 in hardware upgrades, your customers are now able to run Vista across the board when it releases. In fairness, these specs are only Vista-*capable*. The Vista Premium Ready specs require a 1 GHz or better CPU, 1 GB or more of RAM and a graphics card with both 128 MB of video memory and a WDDM-compliant driver. Both ATi and Nvidia are making WDDM drivers available for not only new cards, but previous models, too. So, you can up that hardware upgrade to *maybe* $250, plus, of course, the 30 minutes that it will take you or a system-builder partner to install them.

Seriously, if all that your customer is looking at is price, that may not be a good customer for any of us; I’ve seen others make similar statements in this forum in the past, so I know that I’m not alone in this. SA is a value proposition, not a something-for-nothing deal. Regardless, once your customer is into a standardized software platform, they’re better off (less training, more flexibility in moving people around, more neighborly assistance for newbies) and you’re better off (guaranteed upgrades, easier to sell an overall maintenance package when it includes both software and hardware, only supporting one platform).

If they are, as mentioned, shopping at [online retail store], then they don’t understand value, and they may not even fully understand the value that you and your expertise bring to their businesses.

Back to my initial offer: call [my company’s] Licensing Desk at [phone number], option 2. E-mail them at ‘licensingdesk@[mycompany].com’. They’re going to ask you questions about your customer’s existing software, sometimes hardware, and what the desired end-picture looks like. Then they’ll take a bit of time and put together their recommended solution. We are at least as bad as any of you about over-selling a customer – any customer. We’re going to look for the best *value* for your customer. We don’t know everything, and we occasionally make mistakes, just as everyone does. We know a heckuva lot about licensing, though, and we’ll do everything in our power to make sure that you get the best answers available. BTW, we handle CA, in addition to MS (as well as several others), and we can do up quotes that coordinate Software Assurance and CA maintenance renewals, so you can offer a complete coordinated software renewal to your customers (assuming you like and use the CA products).

This is not a commercial, and I’ve been off of the KoolAid for almost a week now…it’s just that OV is so misunderstood, and is *such a potential goldmine*, that I needed to go off on this tangent. I’ve met many of you, and I have nothing but respect for all of you.

Let us help. We’ll get on calls with you and your sales reps; we’ll do explanatory calls with you and your customers, within proper boundaries. Name what you need: if we can assist, we will…

I was not the one complaining about the complexity, I was only reacting to what I perceived as a rather misleading value proposition.

The funny(?) thing about all this is … it’s really not about the actual cost of the software. In the long run, does it really matter if you pay $100, $700, or $1500 every three years to make your $75,000 / year employee more productive? Of course not. Software is and will probably always be one of the best bargains on the planet. So what we’re arguing about is not ABSOLUTE value but RELATIVE value. We are spending countless hours calculating and recalculating not WHETHER to buy MS software but HOW to buy it. Don’t you see how crazy that is?

What MS somehow fails to see is that there is a big emotional component of the software purchase decision. We have resigned ourselves to the fact that there is really only one choice for most small businesses in the desktop OS, office suite, and file server categories and that choice is Microsoft. We can swallow our lack of options because we know that Microsoft gives us good software that makes it easier for us to be productive. What we resent is that MS is not content to sit on its 95% market share and keep us happy with reasonable methods of buying its software. Microsoft instead seems intent on coming up with an endless variety of licensing and pricing schemes. We greet each new scheme with well-founded skepticism. We say “I’m sure this new plan is good for Microsoft, but how do I know it’s good for me?” Our skepticism is justified when we see campaigns that tout purchase prices of a few cents or dollars when the actual cash outlays are in the thousands. You may not see this as “two point type,” but we do.

I think you’re not really objecting to the complexity of my “point” plan. I think you are really trying to sidestep the fact that Microsoft has for some inexplicable reason decided to permanently abandon the concept of upgrade pricing for its volume license customers.

If you can come up with a program that allows small businesses to convert to a licensing model while feeling good rather than stupid about the way they’ve bought your software in the past, I think you’ll have a winner.

[Another consultant:] I’m late to the game here, but I’ll throw in my two cents to all of the Small Business Platform SKU talk. I’ve just sold two in two months. The first was for a 10 user company, the second who chose the one pay option for 25 licenses. Basically, this product has to be the right fit at the right time for the right client. In our case, one was a new customer opening a new surgery center from scratch. We sold them 18 Dell XP Home desktops and then upgraded them via image to XP Pro with Office installed (this way it didn’t cost them much for system load). They needed the SBS cals anyway with their new server. Does this fit for all of our customers? Hell no. Most buy the onesy twoseys all the time which drives me nuts. Furthermore, I don’t believe that a lot of small business customers actually “get” the value of licensing, and if they do, they’ll often say to me, “$300 in software per person for three years? Wow, that’s $3k/year, $9k for the SKU (10 users). Office 2k does everything I need it to. Thanks anyway.” For those folks, you just have to move on and let them deal with their 15 different copies of OEM nonsense. When it’s time to reload, they’ll get frustrated when they can’t find their media and maybe then they’ll get it. Regardless, I think this product SKU is terrific for the right customer, but just like most articles of clothing aren’t one size fits all, neither is MS licensing. It doesn’t always work, but it has its place. I’ve given my feedback to Eric that I hope they really keep rebates in place with this SKU. In both cases, the rebate made the purchase for the customer hands down. Without it, they would have bought OEM. I just wish the full rebate that ended 3/31 would have stayed around!

[Incidentally, the gentleman who made that last comment was later featured in a Microsoft podcast about his success selling SBDA. The podcast actually does a decent job explaining that SBDA is not for everyone and points out some of the benefits of SBDA beyond cost savings. At this point there was a digression about the financing aspects of the program, and I tried to bring it back on track.]

I think you folks are arguing about very fine points related to the financing costs, when IMO the real questions are these:

1) Does the Small Business Platform SKU make sense for a company that wants to keep up with hardware as well as software advances and is therefore going to be replacing hardware every 3-4 years? Because those companies may be able to get software version upgrades via OEM deals for less than the cost of the Platform SKU. Then the question becomes whether the other SA benefits are worth the extra money.

2) Since there are, I believe, relatively few companies that are literally starting from scratch or upgrading a bunch of new machines that happen to have XP Home and nothing else on them, is the added convenience of the Platform SKU worth the cost of converting to a company-wide license rather than buying only the pieces that really need to be upgraded?

The way I see it, the “typical” company that would buy $8,000 worth of software through the Platform SKU might be able to achieve the same functionality for their business for thousands of dollars less, depending on what they already have and whether they are in a position to buy new OEM licenses at a substantial discount from both retail and volume license prices. Yes, I realize that with Open Value you get more than the licenses themselves. But are the extra benefits worth the extra money?

[Then I got into a pissing match with another consultant about the value of SBDA. I’ll spare you the details.]

It just so happens that I am right in the middle of preparing a proposal for a prospect with the following existing infrastructure:

No server

7 computers total

2 with XP Pro, likely to be Vista-capable in terms of CPU and RAM

2 with XP Home, likely to be Vista-capable

3 with XP Home, unlikely to be Vista-capable

1 copy of Office Pro 2003 (not sure if they are OEM or retail)

6 copies of earlier versions of Office (not sure if they are OEM or retail)

I want to get them SBS03 and get their hardware and software up to current standards, including being ready for Office 2007 and Vista next year.

This is by far the closest I’ve ever come to finding someone for whom the Platform SKU makes sense. I plan to consult my friendly neighborhood licensing specialist at my preferred distributor to get all my options.

If they didn’t have to buy any new PCs, my guess is that the Platform SKU would be optimal. If they had to buy 7 new PCs, I would get OEM Office and add SA to both Office and Windows in order to qualify for next year’s upgrade. But with 3 new PCs needed, I think it’s going to be a tough call.

We’ll see ….

[The software distributor chimed in again.]

I’d like to use your circumstance as an example; I hope that’s not offensive to you.

For the scenario that David describes below, I would order OEM Windows and Office on the three new clients.

The OEM OS is required, as everyone here has discussed numerous times, for any future Open License upgrade attach. By choosing the OEM Office option, the end-user has Office at the lowest legitimate price they are going to find, should they choose not to enroll in SA. I would order the server with OEM software, and sufficient OEM CALs, for the same reasons. One of the key points to remember about OEM:

you have a ninety-day window for the customer to get used to the new SBS and Office 2003 (I know, they already have one copy of Office 2003, but it’s only one) and to sell all of the benefits of SA, over and above the upgrade. Assuming that the end-user decides that they want to add SA to all of the products on all machines, they can order (4) full L&SA of the platform SKU and (3) SA-only of the platform SKU, plus, of course, SA on the SBS to get them ready for R2 and, eventually, Cougar.

If they *don’t* want to put SA on the four existing machines, because they figure that they will be replacing them in the next three years, they can order company-wide SA for the SBS CALs, plus regular SA on the Windows and Office on the new clients, and SA on the SBS. As they buy new machines over the next three years, they can add SA to them, and, when the original agreement ends, they can enroll all of the machines into a new company-wide agreement, because they will all qualify by having existing SA at that time. This may seem like a round-about way to do things, but it allows the end-user to spend the right amount of money for their circumstances, while getting the benefits of SA that are part and parcel of the Open VAlue program.

BTW, if we’re going to ignore the SA benefits, you should look at simply financing the whole shebang via Microsoft Financing, as you all mentioned way back when. IMNSHO, talking about Open Value without talking about SA is a little like talking about buying a car without the engine: you’re kinda missing the whole point of the program…

How could I be offended by your proving my point? I *THINK* — and I do emphasize THINK — that Microsoft just confused the hell out of one of its own leading distributors.

Here’s a cost comparison, using ERPs from the Open Business price list at the MS partner site for the mix and match, and the $797 figure for the Platform SKU:

Mix and Match:

3 Windows XP Pro OEM @ $99

3 Windows Software Assurance @ $108

2 Windows XP + SA @ $239

3 Office Pro OEM @ $325

3 Office Pro SA @ $264

3 Office Pro License + SA @ $720

1 5-pack SBS CAL + SA @ $691

TOTAL: $5,981

Platform SKU:

7 @ $922

TOTAL: $6,454

So Round One does go to Mix and Match. But wait ….

1) My Mix and Match give me only 2 years of Software Assurance instead of 3

2) With Mix and Match, I’ll need to buy 2 Vista upgrades and 1 Office 2007 to get everything standardized next year; total estimated cost = $900

3) There’s a rebate of $125 per platform SKU, for a savings of $875

So now I think the totals are as follows:

Mix and Match: $6,881 (but I do end up with 10 SBS CALs instead of 7)

Platform: $5,579 (but I do get an extra year of SA)

Do I have that right? I wouldn’t be at all surprised if I’ve messed something up.

[Someone else asked, “Isn’t it worth buying the platform sku just to put all of PCs on the same licensing scheme?]

Given the closeness of the race in this particular example, I think that even if the Platform SKU turns out to be slightly more expensive it is indeed worth the extra money. HOWEVER:

1) If this prospect becomes a client, one of the first things I’m going to do is to move their LOB app out of their home-grown Access db and into some commercial software that is designed for their industry. Any PCs they buy starting about six months from now will have no need for Access. Yet I will have locked them into a three year commitment to put Access on all their computers. That’s potentially a waste of hundreds of dollars. Fortunately, they have no plans for expansion in the foreseeable future so I’m not worried too much about this.

2) Look how difficult it was for me to make this analysis. Many, many unbillable hours went into this project. You think the license configurator at http://www.ms-gearup.com/home.asp could help me simplify this? Well, to be fair, if I had remembered that it existed it would have saved me some time looking up SKUs. And to its credit, once you put in an order for both Windows and Office, it puts up this alert in red: You may wish to consider an Open Value CWO Agreement for this order as you have ordered 2 of the 3 platform components. (You get the same message even after you’ve added the third platform component to your quote.) But the configurator is very confusing when it comes to the Platform SKU. I could not figure out how to get the Small Business Platform SKU with Office Pro rather than SBE. And there was nothing in the configurator that helped me run what-if scenarios when it came to adding the cost of OEM software to the mix.

[Distributor guy:] I hate when my mind moves faster than my fingers; I screwed up an entire thought in that…

The end-user will still need to purchase company-wide L&SA for Windows and Office for the existing machines, in order to purchase the company-wide SA-only for the new clients. If the end-user chooses not to do that, they can still purchase SA-only for the new clients (not the platform SKU, but Windows and Office SA-only, non-company-wide), then purchase the SA-only when they replace the existing machines. They can still do a new agreement pulling all of the now-SA-covered machines into a platform-SKU agreement when the initial agreement ends.

Sorry for any confusion… 🙁

OK, now I have absolutely no idea what you are talking about. 8^)

I think what I will tell the prospect that one way or another I will get all of their PCs running XP Pro and Office 2003 Pro, and that sometime next year they will all be able to upgrade to Vista and Office 2007, and when the next version of SBS comes out they’ll get that, too. I will tell them that at the present time I am unable to say exactly what licenses they are going to buy and how much it will cost, but that it will be somewhere between $5,000 and $8,000 and will involve somewhere between 1 and 30 different SKUs.

Then, once they’ve signed the deal, I will send [your company] an exact accounting of what they already own and let D&H tell me how to achieve my goals, including what the least-cost and least-hassle options are (knowing that these won’t be the same).

And if it later turns out that [your company], despite their best efforts, gave me the wrong advice, I’ll bill Microsoft for the difference in cost. 8^)

Based on your earlier post, here are apparently the two options you are looking to choose between:

Mix and Match Total of: $6,881 and you have to have the customer purchase:

3 Windows XP Pro OEM @ $99

3 Windows Software Assurance @ $108

2 Windows XP + SA @ $239

3 Office Pro OEM @ $325

3 Office Pro SA @ $264

3 Office Pro License + SA @ $720

1 5-pack SBS CAL + SA @ $691

+ need to buy 2 Vista upgrades and 1 Office 2007 to get everything

+ standardized next year; total estimated cost = $900 and Mix and Match

+ gives them only 2 years of Software Assurance instead of 3

Vs.

Platform SKU Total: $5,579

7 @ $922 = $6,454 + there’s a rebate of $125 per platform SKU, for a savings of $875, so total is: $5,579 which gives them the 3 years of Software Assurance instead of the 2 with Mix & Match

So in essence, Mix & Match means have your customer spend $1,302 MORE ($6,881 – $5,579 = $1,302), get one year less of SA, and explain that long list of line items (Mix & Match list) instead of having them spend $1,302 LESS, get one year MORE of SA, and show them a single part # and a rebate line. (Not to mention that the Platform option allows them to spread their payments over three budget years vs. paying up front with the Mix & Match option, plus the Platform option provides all of the additional SA benefits of an Open Value Company-Wide Agreement vs. the Open Business option, plus the Platform option provides electronic licenses for all of their Office licenses so they do not need to track them vs. all of the OEM and retail Office licenses you list that they will need to track and maintain as proof of ownership for the SA purchases in Mix & Match.

So breaking it down it comes to: Get more, spend less, easier tracking, and protected licenses (Platform License) or get less, spend more, harder tracking, and unprotected licenses they need to track (Mix & Match). I may be biased, but it appears that the one with the single SKU (http://www.singlesku.com) that costs less vs. the long list of SKUs that costs more would be the one that would provide simple, flexible, savings for your client; however, I’ll let everyone make their own decisions.

Yes, at this moment it certainly seems that in this case the platform SKU makes more sense given these particular circumstances. So I think it’s pretty telling that [distributor guy], who is no slouch when it comes to licensing, was recommending the Mix and Match approach. If this isn’t good evidence that MS licensing is FUBAR, I don’t know what is.

[This thread was taken up later with a new subject line. See Issue 3.]

Issue 2: Double-buying SBS CALs

Since Microsoft Small Business Server comes with 5 CALs, am I double-buying my SBS CALs ?

This is a question that has come up on a few of the Live Meetings I have presented on the Small Business Platform License and in several of the online forums, so I thought I would post the answer and explanation on the Blog for anyone interested to find out the answer:

http://blogs.msdn.com/mssmallbiz/archive/2006/06/04/617398.aspx

For those of you who don’t feel like reading the 1,600 word, 2-1/2 page single-spaced blog entry [That’s somewhat ironic, given the length of THIS blog entry!], the answer is yes, you’re double-buying, but depending on your circumstances you might end up spending less money anyway.

Allow me to paraphrase the actual answer (by actually pasting a paragraph from the Blog entry):

“So back to the original question of, “Are you double-buying” those initial 5 SBS CALs by choosing the Small Business Platform License?”

Choosing the Small Business Platform License will leave you with 5 extra SBS CALs; however, if it costs less to do this (based on the calculations above), I think it’s more like double-receiving, not double-buying of those 5 SBS CALs that is taking place, which should be good for the client. I will leave it up to you to decide for yourself though based on the clients you work with. Is the Small Business Platform License right for everyone? Nothing is right for everyone; however, as you can see, sometimes something that you think would cost more (“double-buying” SBS CALs) actually saves you money and provides you with much more.”

The “Based on the calculations above” statement refers to the several scenarios I walk through showing the result of choosing the Small Business Platform vs. not. (Hence the reason for the long Blog post to provide different examples with detailed explanations).

David, as for your statement of, “but depending on your circumstances you might end up spending less money anyway,” I think you will find that in my examples, I specifically started out with a 5 PC network, which would be the least cost advantageous for the Small Business Platform License and it still came out to cost less. Granted, if you start comparing it to solutions that provide less (such as 2 years of SA instead of 3 and less SA benefits, and OEM licenses with less user rights and require the customer to track the licenses for protection, etc., etc.), you could probably find a scenario that costs less than the Small Business Platform License; however, I am trying to compare like to like solutions providing the client with the same benefits on both sides. If your clients don’t want the benefits included in the Small Business Platform License, then as I even stated in my Blog, “I will leave it up to you to decide for yourself though based on the clients you work with. Is the Small Business Platform License right for everyone? Nothing is right for everyone; however, as you can see, sometimes something that you think would cost more (“double-buying” SBS CALs) actually saves you money and provides you with much more.

Issue 3: Platform SKU exit options

Figured I’d change the thread topic for this new line of inquiry.

OK, so now I’ve spent $6,000 and I’ve gotten my 7-user company on the CWO (that’s Company Wide Option, for you neophytes) Platform SKU with Office Pro. But now my circumstances change. Let’s say sales are going through the roof, so I add a 5-person customer service department whose sole function is to interact with my web-based CRM tool. They don’t need Office, they don’t need XP Pro, they don’t even need an SBS CAL. All they need is an Internet connection.

The Platform SKU rules say I have to spend another $4610 on 5 more Platform SKUs for each new PC in my company. (By this time the Office rebate has expired!) Suppose I don’t want to spend $4600 on software I don’t need. Do I have an out? Or do I have to go back and re-license the first 7 PCs the moment I bring in a new PC that doesn’t play by the Platform SKU rules?

In a less extreme example, suppose I bring on people who do need XP Pro and an SBS CAL but only need Office Basic. I’m SOL, right? Gotta spend the $922 vs. the $125 for Office Basic OEM?

[Another consultant:] I was asked a question this weekend by a client, and was completely unsure of the answer. I still owe them an answer. I can only see this question becoming more common than not…

To keep it generic, lets say company x has several PCs they are going to replace, and just as many Apples they are going to purchase/replace. The Platform SKU makes a lot of sense for them, but it hinges on one thing.

This company currently has a mix of windows and apple computers. They want a technology overhaul, and want to replace just about everything and are very interested in SBS.

Does Microsoft consider an apple computer to be a PC?

The 3 macbook pros they are ordering will be dual booted to XP, and they want those to be regular SBS members, so obviously they need licenses. But what about the other dozen or so macs that are not going to dualboot to xp?

Do they have to purchase licenses for these computers even though they will never actually run the software? Does the answer depend on whether it is an x86 compatible mac?

This company quite literally wants an apple for each windows box. Does that mean they have to pay for twice as many licenses? The Platform SKU will no longer be a viable option for them if that is the case.

[Distributor guy:] From what I know, there is no legal penalty for breaking the Open Value agreement, you simply cannot use it at your convenience. That being said, as long as you don’t try to buy more company-wide licenses later for that customer and **you pay off the agreement in full, if they taken the annualized option**, then you may license any new PCs however you wish.

Hi, [distributor guy]. Can you point me to anything from Microsoft that spells this out in writing? Because your interpretation seems a bit contrary to my understanding.

[Distributor guy:] I’m going to jump in here and let Eric correct me as he sees fit. I’ve done some digging since your last response to me, and I believe that I’ve found your documentation. The part that leaves me a bit uncomfortable is putting some of what I think I see in print, but what the heck…

The documentation that confirms/ignores your question is the Open Value contract itself. My interpretation is that the Open Value agreement itself can only be used to govern **those products which are purchased under it’s terms**. When a customer purchases licenses using the Open Value company-wide contract, they are committing to following the terms of that contract to purchase their licenses. The verbiage in the contract is very clear in defining the contract to licenses purchased under the contract, not to any subsequent purchases or purchases made under any other Microsoft program. (Terms & Conditions, section 1). So, the question becomes: what is the spirit of the contract?

FYI, this is where I start to sweat a little.

I believe that a customer can and should be held to the terms of the Open Value agreement up until such time as the licenses are paid in full; at that point, I believe that the end-user can fairly say that they have upheld their end of the terms and conditions. If, however, they are still in the midst of annual installments (that is, **they are still taking advantage of the program for their benefit**), then they should continue to be bound by the agreement.

Basically, if the customer has purchased licenses at the company-wide price, has purchased company-wide licenses for every eligible PC in the company, and has paid for them, then Microsoft got what they wanted: MS software on every eligible PC available at the time of purchase, and the end-user has gotten what they wanted: a price break for buying MS software for every eligible PC. Now, the corollary in my mind is that the end-user may never again purchase any products on that agreement, if they break the agreement. From what I see, the agreement is done once they break it. SA benefits will continue to be available, but I believe that future purchases under Open Value would require a new agreement, even for non-company-wide products.

I have a copy of the entire contract, if anyone wants to see it. Obviously, as in the case of any contract, it’s all gray unless a court says that this gray is really black and that gray is really white.

Eric, please feel free to correct this, if necessary.

I’m interpreting here, and I’ve been unable to find anything more substantial than this.

Finally, David, I’ve been thinking about that five-person department that doesn’t need any of this software, and I’ve got a thought or so around the points that you raise with them. A) even if all that they do is interact with a web-based application, how realistic is it to think that they will have no need for any of the company-wide products? Will they not interact with the rest of the company via e-mail? Do the machines that they are using not require an OS? B) even assuming all that this department is off by themselves in some little corner of the company, isn’t it poor business to assume that their customer-service will not be migrated inside? Wouldn’t you do better (and do better for them) to move them towards CRM SBE on their agreement? That way, they know what products that they have, they have a single point of contact for problems and issues, and they’ve added more SA benefits based on their additional licenses.

Sorry for the un-godly-long post, but I’d kinda like this clarified from both sides, at this point.

Thanks for your response, [Distributor guy]. Eric, why are you letting [Distributor guy] twist in the wind here? 8^)

This is not a hypothetical situation, BTW. I will actually be placing orders before June 30, so I really need to be sure I have my facts right.

[Distributor guy], if your interpretation is correct, how would your reasoning apply to a company that chooses the pay-up-front option instead of the spread payments option. If I buy 5 platform SKUs now and pay up front, does that mean I can safely add new machines next month without buying the platform SKU for them?

FYI, [Distributor guy], the hypothetical I raised about adding machines that would not need the platform SKU is indeed hypothetical in my case, but here are the answers to the questions you raise:

1) I can certainly imagine adding people without e-mail access, particularly if their sole responsibility is to interact with a web-based app. That app might have internal communication functions built in, and perhaps the business would want to restrict e-mail access for those users for security or productivity reasons. Even if they do need an e-mail client, maybe all they need is the SBS CAL (which includes Outlook 2003) and not Word, Excel, PowerPoint, Publisher, Access, and InfoPath.

2) No, of course they won’t be using a PC without an OS, but since you can’t BUY a PC without an OS they’ll have that part covered. As you well know, the desktop OS part of the platform SKU only includes an upgrade from another OS, plus SA.

3) Comparing TCO of MS CRM vs. competitive products is beyond the scope of this thread. Let’s just assume for the sake of this discussion that the company is committed to a non-MS solution.

Thanks for offering to share the entire contract, but I really have no desire to get a law degree and come up with my own interpretation. I don’t think it’s unreasonable to expect Microsoft to provide a written explanation in plain English that the average computer consultant can understand. If I can’t get that here, where can I get it?

[Distributor guy], if you feel abandoned in the wind, let me know.

David, here’s the answer to your question:

By signing a Company-wide agreement (of any kind, not just the Small Business Desktop/Platform SKU), you are agreeing to purchase one license for every computer in your company for the term of your agreement. In exchange for you doing so, you receive additional Software Assurance benefits and price discounts. If you fail to uphold the terms of the agreement you have entered into, you are in breach of agreement and one of several things can happen:

1) If you have not made all of your payments yet, then your final license confirmation will not be issued to you (meaning you won’t have your licenses) until you meet the terms of the agreement in full.

2) If you have made your payments but are still in the term of your agreement (say you chose the up-front payment), you would still be in breach of agreement since you have violated the company-wide portion of your agreement; therefore, you would not qualify for the benefits of the company-wide agreement and would be required to forfeit the company-wide benefits (make financial payments for the difference between the company-wide agreement prices you received and the non-company wide prices you would now need to have for every license that was issued under the company-wide agreement, plus the company-wide software assurance benefits would be terminated and only the non-company-wide benefits would remain intact). This is all handled through our legal department as a license termination process.

There is a clause that states they are obligated to cover all of their qualified desktops and required purchase additional licenses with each additional install – this is on page 5 item 6 at the bottom of the contract. If your customer does not want to commit to covering all of their desktops for the full three year term, then do not have them sign a Company-wide agreement. They can always purchase single licenses for all of their software or just do Company-wide options for the items they truly do want to cover during the agreement term.

Thank you Eric, for that clear explanation. It confirms what I thought was the case. It also puts yet another nail in the coffin of the Small Business Desktop Platform SKU as far as my customers are concerned. Even if I could save them a few hundred dollars in the short term by using the Platform SKU over a piecemeal approach, I could potentially be forcing them to either buy thousands of dollars of unnecessary software over the next three years or go through a complicated legal and accounting procedure to extricate themselves from their contracts.

I do hope to learn at the partner conference why Microsoft insists on turning its customers into gamblers when it comes to licensing.

[Distributor guy], tell [your licensing team] that they can expect to spend an hour or two with me on the phone this week as we try to figure out how to upgrade my new 7-PC customer from their current mishmash of MS software to something that looks like the Platform SKU but doesn’t have the company-wide gotcha.

I guess I’m unclear on your statement, “I do hope to learn at the partner conference why Microsoft insists on turning its customers into gamblers when it comes to licensing.” We provide three options to try to allow customers to pick one that fits their needs and businesses:

1) Buy software piece by piece – Open Business (for those who want licenses only) or Open Value (for those who want Software Assurance)

2) Standardize your company on a particular product across your company – Open Value Company-Wide

3) Standardize your company on Office SBE, Windows Operating System, and SBS CALs across your company – Small Business Desktop (Platform SKU)

Is there a commitment to receive the additional benefits and pricing advantages of a Company-wide agreement? Sure. It’s not unlike other memberships, contracts, programs, etc. where you commit to something in order to get something additional in return. If you don’t want to make the commitment, don’t; however, realize that you do not receive the same advantages as those who do. Simply purchase one at a time through Open Business or Open Value. Is a company-wide agreement right for everyone?

No. For those that it is, they make the commitment and they get the benefits. For those that believe it is not, they don’t make the commitment and they don’t get the company-wide benefits.

There are many, many, many companies all across the country and the world utilizing Company-wide agreements and have been for years through either an Enterprise Agreement, Open Value Company-wide, or Small Business Desktop license (Platform SKU). When we first introduced the Enterprise Agreement (think of it as the Platform SKU for companies with 250 or more PCs) back in 1997, the larger companies went through this same thought process of “should I or shouldn’t I?” Since that time, the Enterprise Agreement enrollment numbers have grown and grown and grown exponentially. Company-wide is a new concept in Small Business and it is unfamiliar for many. Anytime there is something new, there are bound to be doubts, speculation, etc. It just comes down to each company looking at where they are today and where they see their company going in the near future. Based on that, they need to make the decision they feel best fits their plans. There will always be companies who do who wish they didn’t and those who didn’t who wish they did. There will also be many who do and are very happy they did, which is what we’ve seen as the majority with the Enterprise Agreement and I expect that will be the case with the Small Business Desktop license as well (and yes, that is an opinion, so you can take it as such).

It’s true that the decision about whether or not to buy the Platform SKU is more of a gamble about what the buyer will do in the future rather than the seller. However, it did remind me of the choice about whether to buy Software Assurance, which in large part is a bet about how quickly Microsoft will release a version upgrade.

I suppose only time will tell whether the skepticism you’re seeing regarding the Small Business Platform SKU is because of its newness or because it really does have limited value in the small business market.

As you point out, it’s a brand new program, and we’ll have to see in a couple years whether the early adopters got what they hoped for. It will also be interesting to see how strictly the Platform SKU contracts are enforced. I wonder how many companies will try (and how many will succeed) to find some “wiggle room”: “Gee, do we really need to buy another Platform SKU for this new laptop? The only reason we bought it was so our CEO could check his e-mail from his hotel. We don’t even need to put it on the domain. Will Microsoft care? Nah, they’re a big company ….”

The other thing I’d like to see is a better disclaimer on marketing materials such as lessthanfries.com. Nowhere on that site do I see a warning that buying the Platform SKU obligates you to continue purchasing the SKU for every computer in your company for the duration of the agreement. It’s only hinted at, and I can see how one could interpret the purchase of additional SKUs as optional: “If the number of PCs you have in your company increases, you simply add one Small Business Platform SKU for each additional PC and the new PCs would also receive all of the benefits listed above.”

Perhaps you could add a link from this and other Platform SKU sites so that prospective purchasers could download the actual contract they will have to sign in order to take advantage of this $0.84 deal.

The other point I wanted to make (again) is that by offering all these options (and you left out FPP and OEM in your list below) you are actually costing somebody money. Someone has to take the time to review all the available options for each company and decide which is the most cost-effective. The cost of that time might be eaten by the distributor, the partner, or the end-user, but in any event you’re raising the transaction cost. You do a very nice job in preparing cost-benefit spreadsheets that portray one particular option in the best possible light, but on the other hand you say that “option X is not for everybody.” Therefore someone else is required to do the analysis to see if the product being offered is right in the specific case in question.

Oh, so the only time you analyze options to determine which is the right one is when it is a licensing decision? I used to go through options with my clients for all projects in the past, not just licensing, so they could choose the one best suited for their business. I assumed others did this too. Yes, I would narrow the options down to perhaps the top three or so; however, I would go through the decision process “with” the client not “for” the client so it was a decision we both felt comfortable with. Licensing was just one component of that discussion. Apparently you do yours differently and that is everyone’s prerogative to do it as they see fit.

Some of you have probably heard me say this in several of the sessions I have given in the past: I believe in presenting a client with their options and making sure they are directly involved in choosing the one that best fits them. That way, two or three years down the line, if the client tells me that another option would have been better, the statement they make will be, “I wish I had chosen,” not, “I wish I had known.” From my experience, clients tend to get much more upset if they feel they were not given their options and they come to find out there was a better one available for them that they were not told about. I also used to win many new clients by explaining the advantages of some of the Volume License options and simply stating, “Didn’t your current supplier tell you about this?”

[Consultant from Great Britain:] This is cloud cuckoo land.

Are you suggesting we should give clients an option of which Volume Licencing scheme they should use?

Do you know how much time it takes to price up just one licencing scheme in the real world so you are confident it is right?

This is ridiculous.

Until MS get a grip on the reality of what it’s like to work with Licencing, we are going to continue to get these sort of daft ideas coming out.

BTW I have just signed up in excess of 45,000GBP OVS over the next three years with three clients, so I am selling licencing and I do know how hard it is.

Actually, my clients pay me to tell them what their best option is so they don’t have to do the research and analysis themselves. That’s what makes me a consultant, not a salesman. Or to put it another way, it’s what makes me a “trusted advisor,” not a “trusted options presenter.”

Maybe that’s why I am taking this licensing stuff so seriously and spending so much time on it. I feel that I have an obligation to find the *best* solution for my clients and it’s really irritating when there either is no clear answer or when finding the answer costs me more in time than I am saving for my client.

Honestly, I think if I actually charged my clients for all the time I spent trying to calculate the true costs of all their different options and then dealing with the intricacies of ordering through distribution, they’d be better off just buying a retail copy of everything they need.

So I could just say to the client, “listen, just go ahead and buy the Platform SKU. It may not be the least expensive option to get what you need in terms of cash outlays for Microsoft, but overall it’s probably the least expensive option because it’s the least time-consuming.” But I don’t really feel comfortable with that approach, and I don’t think you want your partners going around with the attitude that Microsoft maximizes its profit margins by encouraging their customers to take the path of least resistance. Do you?

I am suggesting that if you are not offering VL to your clients today, it would probably be beneficial to do so and the Small Business Desktop license is one of those options to consider when making a proposal. Should it be on every proposal? No.

My comments in my last post (and I know, I should have added this there) were made as a former channel member and Partner owner, not as Microsoft. That is what I used to do and it worked extremely well. When I was in the field here at Microsoft and went out with Partners on calls, this option worked very well then too. As an example, in one meeting the CIO flat out told the Partner, “It is our company policy that we never do maintenance agreements, so I don’t even want to talk about Software Assurance. It’s nothing personal, it’s just company policy.” After that meeting, the Partner rep and I sat down, he worked up three quotes: 1) Enterprise Agreement (Platform SKU for the companies with 250+ PCs), 2) Open L+SA, and 3) Open License only. When he went back for the second meeting (that I was not at), he presented the three quotes and said, “I know it is your company policy to not do maintenance agreements; however, it is our company policy to provide you with the three most advantageous options for you and let you choose. You are free to throw out any of these you don’t want to pursue based on company policy or any other means.” While they were in that meeting, I received a phone call on my cell. It was the CIO of the company and he said, “Eric, I have a quick question for you. I’m here with Tom and he gave me the three proposals. My question is, Why wouldn’t I sign the Enterprise Agreement?” Upon looking at the options side-by-side, even though he was originally SURE that SA was not right for them, looking at the SA benefits and cost savings over 5 years along with the benefits of a Company-wide agreement, they determined that by far and away, the Enterprise Agreement was the way to go.

Now, no, not all customers are like this, and no, I am not comparing large enterprises to Small Businesses. I use this example because it is the most extreme example of how when someone (regardless how against SA or a company-wide option they are) sees the additional benefits and cost savings that may be available through a Company-wide agreement, it can change their perception.

So again, I present this as an option based on my experiences in the channel, as a Partner owner, and from talking with Partners and customers directly. Do with it what you will. Don’t just take my word for it. Here is a link to a case study on a Partner from the Midwest (where I came from) that takes the approach I mention and they have an almost universal success rate of Open Value being the choice with their clients. And here’s an even more amazing point… This Partner does not even sell licensing! They are a services only Partner and they present the licensing options to their clients to show them the additional benefits they can get from the software itself through utilizing SA and Open Value. https://partner.microsoft.com/US/40025844. Here’s a direct quote from the Managing Partner at this company: “I think what people fail to understand is that it’s not so much providing the license or discussing the license benefits; it’s the mere fact that you’re spending time educating clients and the more education you do, the more value you add. The more value you add, the more opportunity it provides. The more opportunity it provides, the more money in your pocket.”

Eric, the kind of decision-making you are suggesting only works under the following conditions:

1) The business owner is willing to spend time making a decision about a subject outside of his/her expertise regarding a dollar amount that is small relative to the company’s overall annual budget.

2) The business owner can make a rational decision about the hypothetical need for benefits that he/she has never before experienced (e.g. home use rights, e-Learning, employee purchase program).

3) The competing scenarios are presented in a way that fairly shows both the pros and cons of each scenario. (For example, I would suggest that your lessthanfries.com website and the Platform SKU webcast present an overly rosey picture of the Platform SKU. Where is your slide deck entitled “Company-Wide is NOT for Everybody?”)

4) The scenario presenter is able to gather all the relevant information in a quick and easy fashion, so that it does not cost more to create the presentation than the difference between the cost of the scenarios.

In my world, none of those conditions apply.

I read the case study, and as far as I can see, this is a partner that has decided that Open Value is the right answer for just about everyone and they’ve come up with a way to sell that as much as they can. I don’t see anything there about how they carefully evaluate each client’s situation and come up with a recommendation based on the client’s individual needs. Check out this quote:

“I’m looking to make it simple and easy for my clients,” says Nicolau. With Open Value, “they’re simply going to have access to every upgrade or update that is made available during a three-year period—at no additional charge. And then the [customer’s potential] question: ‘Well, what if I don’t use it? What if I don’t need it?’ You know what, someday you’re going to.”

This sounds like someone who is taking the path of least resistance. The hell with TCO, as long as it’s simple and easy. “Someday you’re going to?” What kind of nonsense is that?

And I’ve said before, the crazy part about all of this is that it’s so unnecessary. If the Platform SKU were the only way my clients could buy Office, Windows, and SBS CALs, do you think I’d go sell them on Linux for the desktop and OpenOffice? Of course not. I’d be selling the Platform SKU every day of the week. But by giving me about 30 different ways to give my clients the rights to send an e-mail and write a letter, you’re forcing me, as a faithful steward of my clients’ resources, to go through all sorts of gyrations to choose among these options and play never-ending games of what if.

[British consultant:] I don’t wish to appear rude, but which part of: “BTW I have just signed up in excess of 45,000GBP OVS over the next three years with three clients, so I am selling licencing and I do know how hard it is. ” is not clear?

I am selling VL. These three deals alone constitute in turnover terms around 40% of my company’s turnover last year. It is a serious part of my business.

I am selling VL and I still say it is overly complex.

It is not helped by the underlying theme from anything that comes from Microsoft that Licencing is straight-forward and simple. If you are going into a greenfield site, perhaps it is, but in the real messy old world working out the best deal / the right SKUs etc etc is a nightmare. A bit more of a dose of reality in the MS Licencing Marketing machine would help to dispel much of the frustration felt by Partners I am sure.

[Four days later, after many discussions with the customer, I went ahead and purchased SBDA for them. It’s the one and only SBDA sale I’ve made since the bundle was introduced. Here’s what happened.]

Issue 4: Ordering the damn thing

How to order the Small Business Platform SKU with Office Professional

1) Agonize for weeks about whether this is really the right fit for your client. 8^)

2) Call distributor, tell them you want the platform SKU.

3) Have distributor give you the part number and price.

4) Mention you want to make sure that (a) they get the version that includes Office Pro and (b) they qualify for the current $125 rebate.

5) Groan to yourself as distributor tells you that they need to do more research because just yesterday Microsoft rejected an order that included the regular Small Business Platform SKU plus the step-up to Office Pro, but MS didn’t say why other than “invalid SKU.”

6) Check www.lessthanfries.com to see if there is any mention of the difference between the “standard” platform SKU and the one that includes Office Pro. Nope, there isn’t.

7) Tell distributor that you are looking at microsoftincentives.com and it looks like rebate is actually valid for Small Business Platform SKU as well as Office Professional. Have distributor ask you to open a chat window to confirm this because distributor’s chat function is locked down.

8) Chat with Holly at microsoftincentives.com. Explain the situation.

When Holly asks if you are a Microsoft partner, lie and say you are not. Because otherwise Holly will tell you to call the Partner Resource Desk instead.

9) If you made the mistake of being honest, call the PRD.

10) While on hold with PRD waiting for them to answer the phone, review Eric Ligman’s webcast from last November. See that Office step-up SKU is listed there separately (269-09052).

11) When PRD picks up, explain what you’re trying to do. Wait on hold again while PRD conferences you in with Microsoft Incentives office to make sure you get the SKUs right. Explain the situation to the Incentives rep. Chuckle when Incentives rep says she’s never even heard of the step-up SKU. Confirm with Incentives that platform SKU is eligible for rebate, though. Ask just to make sure there is no single SKU that includes platform plus Office Pro. Wait on hold again while PRD rep drops Incentives off the call and calls Licensing to make sure. Have Licensing initially tell you that you want the option that gives you Windows, Office Pro, and the Core CAL. Tell him no, that’s not what you want. Then have him tell you that you need to get the elements individually, but you won’t get the pricing advantage that way.

(Apparently he’s never heard of the step-up SKU either.) Wait on hold again while he researches the options. Finally learn that there is an Enterprise step-up license, but he’s not sure if it works with the platform SKU. Ask for part number; drop jaw in amazement when he tells you he doesn’t have any Open Value part numbers. Shake head in disbelief at how clueless PRD and Licensing reps are. Give PRD and Licensing information you already have and then tell them they need to get in touch with Eric Ligman to get some training and documentation on this so that they can provide useful information to people who call.

12) Call distributor back. Tell them to go ahead with order of platform SKU plus step-up, even though it got rejected yesterday, because you want to document that you placed the order before June 30. Have distributor warn you that 269-09052 is not a company-wide SKU. Reassure distributor that it’s OK, because step-up doesn’t have to be company-wide. Have eyes bug out when you learn that step-up SKU only costs $29 per seat per year; ask self why Microsoft bothered to add this layer of complexity rather than just create the platform SKU with Office Pro to begin with.

13) Decide whether you are going to bill the client for the extra time that you just spent wading through this morass of complexity. Remind self that you quoted a flat fee for the project. Damn!

14) Relieve stress by firing off indignant, self-righteous e-mail to Yahoo group. Plan to have a good stiff drink after hours.

[Distributor guy:] I need to add the additional steps that we did not pass on to David:

send order as specified to MLGP

have order rejected by MLGP

spend a day on e-mail with MLGP asking why they are rejecting the step-up products (they let the rest go through to create the agreement) do everything in our power to keep our customer happy

The problem is not the level of knowledge at the distributor, the problem seems to be inconsistent knowledge in processing. Sadly, we have two separate agreements that we’re going through with this right now, so it’s not just David that’s suffering through this.

The agreement is already processed with the SB Platform SKU, so your customer has already qualified for the rebate. In the meantime, we’re going to continue to work at getting this square with MLGP ASAP.

Issue 5: Are those SBS CALs User CALs or Device CALs? (January 2007)

[That British guy again.] Just discussing a new SBS server with a client with OVCW Licence agreement.

They have one user that works at one desk in the mornings and one desk in the afternoon. Anybody any ideas what the implications of OVCW is in this situation? Would they need to licence both machines separately? Is there any difference whatever Open Value licencing scheme they go for?

Company-wide licenses are per device, not per user. You simply count how many PCs you have in your company and … wait a minute … that makes perfect sense for the Office and desktop OS CALs, because those are always per device anyway. But what about the SBS CALs for users who are authenticating from multiple devices (desktop, laptop, home PC, PDA)?

How do they get covered? Surely you’re not supposed to buy a Small Business Desktop Advantage license for every PDA and home computer that will be accessing the system. Maybe this is why you get one 5-pack of CALs for every Small Business Desktop Advantage license you buy?

Damn, just when I thought I knew what I was talking about … 8^(

If they do an Open Value Company-Wide Agreement, then they would be purchasing a license for every PC already (hence the name “Company-wide). So it would not matter which machine the user worked from since each PC would have a license already. Make sense?

So what about the folks who are using Exchange and Companyweb from devices other than company-owned PCs? Does the Company-Wide SBS CAL “double” as both a device CAL and a user CAL? This question must have been asked and answered before but I can’t for the life or me remember how it works.

I checked with my TPAM team and got this answer:

“At the time of install you can choose which type of CAL he would like them to be. In the licensing portion of SBS is a choice for user or device so he can make them whichever he wishes.”

I know that’s true for the 5 CALs that come with SBS, but I didn’t know that was true for the CALs included with Small Business Desktop Advantage. Eric, does this square with your understanding of how SBDA works?

I finally took the time to look this up. I don’t see anything in the January 2007 PUR about this. The January 2007 Product List simply says “The small business desktop products are available to Open Value customers when they select the Company-wide option. The Small Business Desktop Platform includes the most current version of Office Small Business Edition, Windows Desktop Operating System Upgrade, and the Small Business Server Client Access License. The small business desktop platform products are identified with an “E” in the Open Value column(s).” To me, that paragraph is consistent with the CALs in the Platform being “either/or,” but who am I to say?

Yes, the SBS CALs in the Small Business Desktop Advantage can be User or Device CALs and they can be switched from one to another as the client sees fit. This is one of the advantages of the SBDA. This is something we have covered many times during the Small Business Desktop Advantage Sales Forums (http://www.msreadiness.com/sbdesktopadvantage).

Issue 6: Qualifying products for the Vista component of SBDA (February 8, 2007)

[Rich, Another consultant, not British this time:] I need some clarity on what can and cannot be done.

I have a client that has been on a Windows XP Home peer-to-peer network for the past three years. They are getting Small Business Desktop Advantage Company-Wide and get SBS 2K3 R2. For now they just want to use the XP Pro upgrade which is included in SBDA. Next year they are moving to Vista. Am I correct in assuming that they can upgrade to Vista from SBDA because they have already upgraded their XP Home to XP Pro via the SBDA?

I have this answer included in my Blog entry from Feb. 3<http://blogs.msdn.com/mssmallbiz/archive/2007/02/03/no-windows-xp-home-is-not-a-qualifying-desktop-operating-system-for-the-windows-vista-business-upgrade-or-upgrade-sa-through-volume-licensing.aspx>, and it will probably come up this morning in the Small Business Desktop Advantage Sales Forum<http://www.msreadiness.com/sbdesktopadvantage> as well this morning. Here is an excerpt from the Blog entry:

Windows XP Home Edition

Windows XP Home Edition as a Qualifying Operating System (OS) for Windows Upgrade with Software Assurance

Customers* with Windows XP Home Edition licenses purchased on or before December 31, 2006 may acquire Windows Upgrade Licenses with Software Assurance (U & SA). This offer expires September 30, 2007.

*For customers under Enterprise Enrollments and Open Value companywide agreements, this offer applies only to initial orders under new enrollments and agreements. It does not apply to subsequent orders under new enrollments and agreements, nor to renewal enrollments and agreements.

So, your clients purchased their Windows XP Home licenses prior to December 31, 2006. This means that they would qualify for the Windows Vista Business Upg +SA license (which is included in the SBDA). As such, they have the rights to choose Windows XP Pro, Windows Vista Business, Windows Vista Enterprise, or Windows Vista Ultimate on those machines on they purchase the Small Business Desktop Advantage for their company. If they want to start with Windows XP Pro today and then later upgrade again to one of the Windows Vista versions, no problem since those rights are included in the SBDA. I hope this clarifies it.

[Rich:] What if they bought a PC with XP Home this year? Doesn’t the fact that they have XP Pro via SBDA solve the issue for them to upgrade to Vista?

As listed in the Microsoft Product List, as of January 1, 2007, Windows Home versions do not qualify for the Windows Upgrade or Upgrade + SA through any Volume Licensing Program. I included the qualifying products chart in my Blog post on the 3rd.

So the value of the desktop OS upgrade in SBDA just fell to $0 unless you need the delta feature set of Vista Enterprise, is that right?

[Rich:] Good question. What’s the point of having “upgrade” in the license if you can’t really upgrade? I guess the only upgrade is XP Pro and Vista Business. According to the chart Eric has even Windows 2000 and NT 4.0 qualify over XP and Vista Home!! Amazing.

[Aussie consultant, chiming in:] But Windows 98 doesn’t and that was a home-level OS just as XP Home is.

If you look carefully, all of the older business-level OSes allow upgrades to Vista Business but none of the home-level OSes do. Can you think why that would be? You should be able to see that Windows 98 and Windows XP Home, all targeted at the home user by Microsoft were meant to be used by *home* users. And Windows 2000 Professional and XP Professional were targeted at the business user by Microsoft and were meant to be bought and used by the business user.

This means that to upgrade to Vista Business, as was the case when upgrading to XP Pro, you need to have an earlier version *business* operating system. Windows 98 didn’t qualify for a Windows XP Pro Upgrade either – only to XP Home.

This is in the same way that Windows 2000 Pro won’t allow you to upgrade to Windows 2003 Server whereas Windows 2000 Server will.

I hope this helped clear this up a little.

Rich, yes, Windows 98 and 2000 Pro are listed as qualifying Operating system licenses for the Windows Vista Business Upgrade in the chart I posted. These also qualified for the Windows XP Pro Upgrade as well. Back in the Windows 95 and 98 timeframes, you may recall that these were considered Operating Systems that could provide benefits to businesses and were not positioned as Home only Operating Systems, plus we really did not have a Business desktop O/S and a Home desktop O/S. When Windows XP was released, this was when we called out the Professional version and the Home version specifically to differentiate between the two. One was meant for home and one was meant for the professionals (business). This same Pro/Home path continues in the Windows Vista line. With Windows Vista, only business versions of prior Desktop Operating Systems qualify for the Business version upgrade of Vista. As such, as you track the Business line of Desktop Operating Systems backwards, you get:

– Windows XP Pro

– Windows 2000 Pro

– Windows NT 4.0 Workstation

– Windows 98

As such, these are the Desktop Operating Systems that qualify for the Windows Vista Business Upgrade today. Does that help?

[The esteemed Susan Bradley, who I don’t have a problem calling out by name:] Microsoft meet reality.

Here in small biz we blur the lines between home and business. I do business at home, and visa versa.

I totally understand that you need/have to have a Business SKU to have domain join and all that. I understand that it’s technically not able to go from Vista Home Premium to Business as the MCE stuff is dropped out. I understand the qualifiers.

But there is a severe disconnect between understanding the technical issues and the reality of that “retail” strategy.

The reality is that nearly all of the laptops/computers sold in retail are Vista Home Premium. The default OS sold on small business Dell store is Vista Home Premium.

So here’s the challenge to you, Eric.

As it stands now. What is the best way to get to Vista Business coming in from an OEM platform.

Directly buy Vista Business?

Per my read we cannot buy Vista Business upgrade and use the “Brian”

method of clean install as that’s not a qualifying version. So the only road/path I see is that for the majority of folks is to do a WindowsAnytimeupgrade to Ultimate as going to be the easiest path, less messing, more of an inplace upgrade.

Or is there another “base” that makes sense with the Desktop sku?

What’s the best cost efficient path?

I understand the road blocks. And know that we can’t technically get around them due to the manner in which the software has been coded up.

Can you showcase the best way around these roadblocks?

Let’s go make some lemonaide, okay?

[Rich:] Thank you for the explanations.

But why at one time was XP Home a qualifying OS to upgrade to XP Pro but now is not? The explanations make it sound like XP Home never qualified for XP Pro upgrade.

[Aussie:] Because even though some people say that Microsoft doesn’t change their Licensing just to confuse us, here’s yet another example of a change to their Licensing, just to confuse us and have our clients shell out more moolah!

And that brings us up to date. Wow, just cutting and pasting that was exhausting. I can’t believe I spent that much time writing it in the first place! It will be interesting to see where the discussion goes from here. I’ll certainly keep you posted.

Posted in All, MS Licensing, Office 2007, Server 2003, Software, Technology, Vista, Windows XP on Feb 9th, 2007, 2:00 am by David Schrag   

3 Responses

  1. January 10th, 2008 | 11:59 pm

    […] Small Business Desktop (don’t get me started) […]

  2. October 5th, 2008 | 1:45 pm

    It is quite eveident that Microsoft is missing the boat. Most Small Businesses will not buy the licensing because it is perceived to be a rip off. In addition, for the resellers the rip off is having to justify and quantify and explain all these variations in licensing what if choices. Give me a break. YOu notice how many licenses Apple and Linux have for their OS? Hmm, 1 maybe 2, oh maybe three if you count the server. The SBDA is a waste of time for a reseller who needs to work on slim product margins.

  3. June 19th, 2012 | 6:52 am

    […] I think David Schrag has summed up licensing best in his blog post:http://davidschrag.com/schlog/85/the-small-business-desktop-advantage-is-neither-a-desktop-nor-an-ad… […]

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