Microsoft's Step Up to Customer Confusion

As if Microsoft hadn’t made Office 2003 buying complicated enough by offering six different product versions. Now, new licensing promotions announced today add special Migration and Step-Up licenses for Enterprise Agreement, Software Assurance and Upgrade Advantage customers. Conceptually, the promotions are a good idea. Microsoft is giving customers that signed up for upgrade protection before the company announced the plethora of Office 2003 versions an opportunity to migrate or upgrade without having to repurchase new licenses. But the new programs add unneeded complexity and penalize customers for Microsoft’s problems.

The first part of the Migration promotion at least attempts to fix a problem. In the process of adding more Office versions, Microsoft still somehow managed to eliminate two: Office Professional with FrontPage and Office Developer. Customers subscribing to one of the volume licensing programs with upgrade protection could move to comparable bundles: Office Professional Edition 2003 and Office FrontPage 2003; Office Professional Edition 2003 and Visual Studio Tools.

The second part is likely to confuse some customers. Under the promotion, many volume licensing customers running Office XP Standard would now have the option of running the same four individual applications--Excel, Outlook, PowerPoint and Word--found in Office Professional Enterprise Edition 2003. Strangely, Office Standard 2003 offers the same four applications. So, why would Microsoft confuse customers by giving them a second option to run a portion of the Professional Enterprise Edition (The promotion doesn’t include rights to use Access, Business Contact Manager, InfoPath and Publisher)?

Here’s the fundamental problem: Microsoft chose to limit the much hullabalooed Extensible Markup Language (XML) capabilities in four of the six Office 2003 versions. Only Office Professional and Professional Enterprise editions come with the full XML capabilities, which would allow businesses to create custom schemas for manipulating data. The other versions use Microsoft proprietary schemas to save XML, which limit the portability of the data among some other programs, such as competing productivity suites.

So, volume licensing customers moving from Office XP Standard to Office Standard 2003 wouldn’t get the benefit of the full XML capabilities. The Migration promotion is Microsoft’s attempt to remedy the situation. But a more straightforward approach might be to simply extend the XML capabilities to more versions of Office. After all, it’s software, and Microsoft doesn’t need rocket scientists or massive retooling to turn on another feature. The Migration promotion reeks of customer confusion that simply is uncalled for.

The Step-Up promotion is a marvel of complexity, mainly because of the difficulty presented for figuring how much the new licenses cost. I have to give Microsoft credit for trying to do something right, even if questionably executed. Step-Up would allow Office Standard customers to move up to Office Professional Enterprise Edition without having to pay for a brand-new license. For businesses interested in some new applications available with the high-end version, the Step-Up license is certainly cheaper than buying a brand new license.

According to Microsoft’s licensing Website, "The Step-up License price is the difference between the License and Software Assurance (L&SA) price of the Professional Edition and the L&SA price of the Standard Edition. For Select License and Open License Value, depending upon when it is acquired, the Step-up License price may then be spread out in equal annual payments for the remainder of the agreement term."

While the formula seems simple, the calculation is complicated by the existing licensing plans' span of two- or three-year contracts. Some customers with mixed Software Assurance and Upgrade Advantage contracts face additional price calculation complexity. Customers would have benefited from a simpler metric, such as some type of flat rate for the upgrades. After all, this is a 12-month promotion, not a permanent program. If that isn’t easily done under the current licensing structure, then maybe Microsoft needs to further simply its entire volume-licensing program.

I applaud Microsoft’s attempt to offer customers more value from Office 2003 upgrades. But potentially causing greater customer confusion isn’t the right way to go about it.

Posted by Joe Wilcox at August 04, 2003 05:45 PM