Microsoft adding subscription option

In addition to the launch of its new Software Assurance licensing program, Microsoft Corp. will offer a new subscription option for its software licenses beginning Oct. 1.

Most customers currently buy a perpetual software license, which means they can use the software for as long as they choose. But with the subscription option—also referred to as a nonperpetual license—customers pay for rights to use the software for a specific timeframe.

Kathryn Mihalich, business and operations manager for Microsoft Government, thinks federal agencies will be less interested than commercial customers in the subscription model because government information technology shops cannot always bank on future funding.

"If they don't get appropriated next year, then they can't afford for Microsoft products on the desktop to go away," she said.

One area in the federal market that is using the subscription model is NASA's seat management program, called the Outsourcing Desktop Initiative for NASA. OAO Corp., one of several ODIN contractors, negotiated a special nonperpetual license for the Microsoft software it provides to NASA on about 23,000 computers, according to Jack Garman, vice president of enterprise IT outsourcing for OAO.

The subscription model made sense in the seat management context. "The very nature of outsourcing is to get predictable budgets," Garman said. "When [an agency] goes to ODIN for a fixed price per seat, per month, then behind that we go [to the vendors to] get fixed price everywhere we can."

Now that Microsoft will offer the subscription option to all of its customers, Garman hopes OAO will get better prices from Microsoft. "I don't think that we got as good a deal as they're going to give the whole world because we were the first," he said. "We have every expectation that our [price] will go down."