For subscribers only
Microsoft introduced one other significant change to licensing with the introduction of an optional subscription program for its largest customers. Speculation earlier in the week had the software maker forcing companies using the Enterprise Agreement program to abandon perpetual licenses for three-year subscriptions.
Enterprise Agreement licensees, like anyone else, pay once for software with the right to use it indefinitely. But those opting for the subscription plan would have to repay every three years.
MacDonald praised Microsoft's decision not to force a switch to subscriptions. "Making them mandatory would have been a huge tactical error on the part of Microsoft."
Microsoft also introduced a buyout option that would allow companies to return to a perpetual license by paying 1.5 times the third-year subscription fee.
"This is like leasing a car," MacDonald said. "Microsoft is saying you can buy out the lease in the end."
The company also put a 5 percent to 8 percent increase cap on the next three-year contract.
Still, MacDonald remained cautious, seeing subscriptions as the future of Microsoft licensing.
Henningsgaard said that while most customers want to own software as an asset, the subscription model works for "customers who view software as an expense to them." He estimated those interested in subscriptions "is about 15 to 20 percent today and moving toward the majority in a couple of years."
