SMB partners lay into Microsoft over Office licence lock-in

Vendor accused of foisting Office 365 on SMBs after it rules fully packaged product Office licences are not transferable

Some Microsoft small business partners are concerned that the vendor is forcing their customers towards Office 365 by making licences for its fully packaged product suite non-transferable.

The full commercial licensing details for Office 2013 are due to come out next week when it is made generally available to businesses.

But some resellers which supply SMB customers can sell the consumer-focused Home and Business offering as a fully packaged product (FPP), for which details have already been announced.

For these Office products, Microsoft has ruled that "the Office 2013 software is licensed to one computer for the life of that computer and is non-transferable."

The vendor added that if customers want to use Office applications across multiple devices, "Office 365 Home Premium works across up to five devices (Windows tablets, PCs or Macs) and can be transferred across devices".

But the subscription-based Office 365 offering is not right for smaller businesses according to some resellers, which claim that customers would not want to pay an annual subscription simply for a transferable licence. Others claim that the vendor is unfairly encouraging SMBs to move to the subscription model to gain control over the licences.

Paul Spelling, managing director of Storm IT, claimed that customers would not be happy to pay for Office on subscription, and would rather have the transferable licence on the FPP.

"Businesses will not take this on the chin. If I sell Office to customers now, they might use it for between three and seven years. It is a tool to produce something; you would not buy a new stapler every year, so why would you do it with software? Over seven years it could cost about £500," he added.

"Microsoft thinks it is a new model for them, but they are not looking at the customer's point of view – it is 100 per cent revenue generation for them, not better value for the customer."

He added that by making the software licence non-transferable, if PCs fail soon after purchase, customers will not want to pay again for a licence.

Paul Dadge, managing director of PC Paramedics, claimed he has seen other firms swooping in on the small business space.

He said: "This is done without any doubt to push resellers down the 365 subscription pathway. We are already seeing an increase in third-party mail server vendors such as Kerio reaching out to fill the small business space left by the demise of Small Business Server and Exchange in the 25 [users]-and-above space."

Despite concern from small business resellers, licensing and software asset management (SAM) vendor License Dashboard defended Microsoft's decision.

Matt Fisher, License Dashboard's business development manager, said: "We are talking about a heavily discounted version of the software, so why shouldn't they tie it to a single machine? I would have a problem if it applied to enterprise versions of the software, but that does not appear to be the case.

"In this case, I think Microsoft has got it right."

Reseller Bechtle's software manager Richard Gibbons said making Office 2013 non-transferable should not affect VARs supplying the mid-market or higher because products on Volume Licensing deals on not affected.

He added that the move will make the FPP Office 2013 a "less attractive product", however.