Microsoft 2015 Annual Report Download - page 19

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Microsoft Azure, and Office 365. Other services delivered online include our online advertising platform with offerings
for advertisers and publishers, as well as Microsoft Developer Network subscription content and updates, periodic
product updates, and online technical and practice readiness resources to support our partners in developing and
selling our products and solutions. As we increasingly deliver online services, we sell many of these cloud-based
services through our enterprise agreements and have also enabled new sales programs to reach small and medium-
sized businesses. These programs include direct sales, direct sales supported by a large network of partner
advisors, and resale of services through operator channels, such as telephone, cell, and cable providers.
We also sell our products through our Microsoft retail stores and online marketplaces.
LICENSING OPTIONS
We license software to organizations under agreements that allow the customer to acquire multiple licenses of
products and services. Our agreements for organizations to acquire multiple licenses of products and services are
designed to provide them with a means of doing so without having to acquire separate licenses through retail
channels. In delivering organizational licensing agreements to the market, we use different programs designed to
provide flexibility for organizations of various sizes. While these programs may differ in various parts of the world,
generally they include those discussed below.
Customer Licensing Programs
Open Licensing
Designed primarily for small-to-medium organizations, the Open Programs allow customers to acquire perpetual or
subscription licenses and, at the customer’s election, rights to future versions of software products over a specified
time period (two or three years depending on the Open Programs used). The offering that conveys rights to future
versions of certain software products over the contract period is called software assurance. Software assurance also
provides support, tools, and training to help customers deploy and use software efficiently. The Open Programs have
several variations to fit customers’ diverse ways of purchasing. Under the Open License Program, customers can
acquire licenses only or licenses with software assurance, and/or renew software assurance upon the expiration
of other existing volume licensing agreements. Under the Open Value and Open Value Subscription programs,
customers can acquire perpetual or subscription licenses, respectively, over a three-year period. Online services are
available in each of the Open Programs.
Microsoft Product and Services Agreement
Suited for medium-to-large organizations, the Microsoft Products and Services Agreement (“MPSA”) provides
customers the ability to purchase online services subscriptions, software licenses, software licenses with software
assurance, and renewals of software assurance through a single agreement. Software assurance and online
services subscriptions are generally available up to three years.
Select Plus Licensing
Designed primarily for medium-to-large organizations, the Select Plus Program allows customers to acquire
perpetual licenses and, at the customer’s election, software assurance over a specified time period (generally three
years or less). Similar to Open Programs, the Select Plus Program allows customers to acquire licenses only,
acquire licenses with software assurance, or renew software assurance upon the expiration of existing volume
licensing agreements. A subset of online services are also available for purchase through the Select Plus Program,
and subscriptions are generally structured with terms between one and three years. In July 2014, we announced that
we would no longer sign new Select Plus agreements with commercial organizations starting July 2015, and
encouraged customers who want to purchase licenses to transition to the MPSA. We expect Select Plus business to
transition to the MPSA within a few years.
Enterprise Agreement Licensing
Designed primarily for medium- and large-sized organizations that want to acquire licenses to online services and/or
software products, along with software assurance and obtain the best value by standardizing on a common IT
platform across the organization. Enterprises can elect to acquire perpetual licenses or, under the Enterprise
Subscription option, can acquire non-perpetual, subscription licenses for a specified period (generally three years).
Online services are also available for purchase through the enterprise agreement and subscriptions are generally
structured with three-year terms.