10 Key Licensing, Pricing Changes For Vista, Office 2007

Microsoft has instituted at least 10 pricing and licensing changes for Windows Vista and Office 2007 that solution providers and end users should heed before taking the plunge, experts say.

As the Redmond, Wash., software giant prepares to ship its next-generation "Longhorn" wave of desktop products on Jan. 30, licensing expert PCMS IT Advisor Group of Cincinnati spotlighted key pricing and licensing changes that will impact enterprise and SMB customers that buy Enterprise Agreements, Select Agreements and Open Value contracts.

Although the most significant changes are on the enterprise side, Microsoft has announced major new options for Enterprise Agreement and Open Value customers, a new Office 2007 offering, a new Exchange Enterprise client access license (CAL), a new desktop product available only with a Software Assurance subscription, and new electronic Volume Activation 2.0 requirements in which software must be activated through Microsoft online.

Last month, PCMS IT Advisor announced its License Acquisition Strategy Services Offer (LASSO), a program that finds, identifies and confirms which software assets are being used on customer sites and clarifies the customer's licensing and version status.

Matt Scherocman, vice president of consulting at PCMS IT Advisor, noted that while each customer's situation is unique, there are 10 pricing and licensing moves that will impact all Vista and/or Office 2007 customers. They include the following:

1. Price increases for Office Professional and Project. Upgrading from Office Pro EE 2003 to Office Pro Plus 2007 entails a more than 5 percent price increase, and upgrading to the new Office Enterprise 2007 represents a 22 percent cost hike.

2. Office Enterprise 2007 is a new product and includes Office Professional Plus 2007, OneNote and Groove. This complements Office Standard 2007 and Office Professional Plus 2007 Office suites.

3. New CALs are available for Exchange Enterprise CAL and SharePoint Enterprise CAL.

4. The new Enterprise CAL Suite consists of the Core CAL Suite (CALs for Windows, Exchange, SharePoint and SMS Servers) and CALs for Office Communications Server Standard/Enterprise with instant messaging and Web conferencing, SharePoint Enterprise, Exchange Enterprise, Windows Rights Management Services, Operations Management Client and Forefront Security Suite.

5. Vista Enterprise offers BitLocker encryption, a multilingual user interface, a subsystem for Unix-based applications and Virtual PC Express and is available only to customers with Software Assurance. 6. Access to the new Microsoft Desktop Optimization Pack in 2007 with Softgrid application virtualization and streaming, Software Asset Inventory Services, Advanced Group Policy Management and the Recovery and Diagnostic Toolkit will be available to Software Assurance customers only.

7. The new Professional Desktop costs roughly $298 per user, per year as part of an Enterprise Agreement covering 250 users. It includes three components: the Core CAL, Windows Professional Desktop Upgrade and Office Professional Plus. The Core CAL with access to Windows, Exchange, SMS and SharePoint servers is priced at roughly $68 per user.

8. The new Enterprise desktop costs roughly $406 per user, per year as part of an Enterprise Agreement covering 250 users and consists of three components: the Core CAL, Enterprise CAL, Windows Professional Desktop Upgrade and Office Enterprise. The Enterprise CAL includes all of the above CALs and all features of the new Enterprise Suite.

9. The Standard CAL offers access to core server features, and the Enterprise CAL offers access to advanced features, such as failover support and support for multiple processors. Customers must also purchase a Core CAL to run an Enterprise CAL.

10. The Open Value upgrade from Office Pro to Office Enterprise costs $70. Outlook is no longer part of the Exchange CAL.

PCMS IT Advisor acknowledged that the new licensing and pricing scenarios are complex and confusing but said customers can enjoy discounts of between 52 percent and 69 percent if they buy an Enterprise CAL rather than buying stand-alone CALs and deploy the software.

"The Enterprise CAL is a phenomenal suite of products that Microsoft has combined, and we have a number of clients who will be migrating to this new suite of products while the cost savings of bundling all the products is so compelling," Scherocman said. "Companies selling to the enterprise space should definitely teach their clients about the Enterprise CAL Suite and help them determine if they will get a positive ROI from purchasing all the software in one bundle," he added.

What's confusing is that Microsoft offers Standard and Enterprise CALs that users can buy for accessing individual servers and, separately, the company offers the Enterprise CAL Suite bundle. Open Value customers can buy the Standard and Enterprise CALs for the servers but not the Enterprise CAL suite, according to Scherocman.

"The biggest change for SMBs is that Microsoft separating functionality for their core SharePoint and Exchange products into the Standard CAL and Enterprise CAL segments," he said. "Clients have always had to decide to deploy Exchange Server Standard or Enterprise. However, now they must decide whether they need an Enterprise CAL on top of their standard CAL."

Vista stands to give the channel overall a big boost in business during 2007. Scherocman said he expects Vista will increase licensing sales in PCMS IT Advisor's Cincinnati office alone by $1.5 million this year and boost its desktop deployment services by about $180,000.