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Microsoft nixes Office deals

Corporate customers of Microsoft Office applications are losing a licensing option at the end of this month.

Corporate customers of Microsoft's (MSFT) Office applications are losing a licensing option at the end of this month.

Peter Boit, general manager of volume licensing, said Microsoft will no longer offer concurrent licenses for Office as of December 1. In Redmond-speak, that means the company will no longer offer the Maintenance Plus and Upgrade Advantage Plus portions of its Select and Open license programs. Customers who already have concurrent licenses will have until the end of their current licensing agreement to switch to a different licensing plan, Boit said.

Concurrent licenses allow large accounts to set a number of users who might use the software, which would run centrally on a server. If a 500-person company has 100 people who are likely to use the product simultaneously, the company would buy a 100-user license. But such licenses require monitoring software to keep tabs on the number of users and are generally too complex, according to Boit.

"Very few of our customers are running [Office] concurrently," he said. "The No. 1 thing we keep hearing is that they want much simpler licensing terms and programs."

The percentage of corporate accounts using Office that have concurrent licenses is in "the low single digits," Boit said.

One industry analyst wasn't convinced that customers were complaining about the complexity and in fact pointed out that some were quite adept at taking advantage of concurrent licenses.

"Savvy customers can use it to drive down costs," said Dan Lavin of market research firm Dataquest. "For example, certain customers were using concurrent licenses around the globe," with a European office taking one shift and the California office signing on nine hours later.

One Microsoft competitor, Corel, jumped on the news as an opportunity to promote its own concurrent licensing schemes. "Corel continues to offer this significant and popular benefit to our customers," a company spokeswoman said in a statement.

Corel last year slashed prices on its own WordPerfect application suite and made it extremely inexpensive to run from a central server.

Microsoft will continue to offer volume licensing and let users run applications from a central server, Boit said, but prices will be set per desktop.

One way Microsoft will let multiple users run apps on a central server is with Hydra, the code name for a layer of software for Windows NT Server 4.0. Hydra allows multiple clients of various types to use programs residing on the server. The company has not yet announced any Hydra licensing plans.

The debut of the technology, scheduled to coincide with Comdex in less than two weeks, is part of a plan by the company to offer alternatives to the thin client and network computer models championed by the likes of IBM, Oracle, and Sun Microsystems.