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UPDATE: Office 2010 Upgrade Deal Expiring in July

Microsoft has quietly set the clock ticking on a discount offer to organizations considering upgrading to Office 2010.

Through June, Microsoft is offering a 50 percent discount to "open value subscription" customers upgrading to Office 2010. Microsoft calls this discount program the "up-to-date" (UTD) offer. Whether an organization can take advantage of it or not depends on the version of Office that's currently licensed.

For those open value licensees of Office XP, the half-off offer has already passed. No discount is available.

Here's how Microsoft figures it. Under the UTD program, Microsoft offers a so-called "N-2" upgrade, meaning that it will be 50 percent off for users two product generations away from the current volume licensing release.

Under Microsoft's formulation, after April 27, Office XP became the N-3 release, putting it out of range of the offer. April 27 was the date Microsoft said it released Office 2010 to volume licensing customers with Software Assurance.

Currently, Office 2003 represents the N-2 release. The N-1 release is Office 2007. So there's still time for open value licensees of Office 2003 and Office 2007 to get half off when moving to Office 2010 -- that is, through June 2010.

After June 2010, Microsoft will go back to using its "N-1" method of calculating the UTD open value subscription licensing discount offer. So after June, only Office 2007 open value subscription licensees will be able to get the discount.

These details about the UTD offer are clarified by Eric Ligman, global partner experience lead for the Microsoft Worldwide Partner Group, in a blog post here.

Understanding software licensing is like getting a second degree. Consulting firm Directions on Microsoft has seminars devoted to understanding Microsoft's licensing. According to Paul DeGroot, an analyst at Directions on Microsoft specializing in Microsoft licensing and product support, this UTD deal represents the only time that open value subscription licensees can get credit for their older Microsoft software. Neither the Enterprise Agreement nor Enterprise Agreement subscription have such a discount.

DeGroot explained that open value subscription is unlike other open value licenses in that it does not require the purchase of Software Assurance (SA). SA is a licensing option that lets organizations upgrade to the next version of a product within the SA contract's time period. Open value subscription costs less "because you never pay for the licenses," DeGroot said in an e-mail. However, after the three-year subscription period is over, organizations will either have to buy the licenses, renew the open value subscription or just stop using the software.

For those organizations upgrading from Windows XP to Windows 7 company-wide, open value subscription requires a license for every PC in the organization. So, if the company already owns Windows 7 licenses on some of those PCs, then it still has to pay for licensing again on those same PCs under open value licensing, DeGroot explained. However, he noted that "Enterprise Agreements have the same problem."

One important point to note about the UTD deal is that organizations with open value subscriptions to Office 2003 face losing the UTD discount if they haven't upgraded by July. And that brings up a question of value, according to DeGroot.

"This [Office 2003] is six-year-old software, and there's a reasonable argument that the customer has gotten full value out of that product and are not being penalized when they're asked to start paying for Office 2010," DeGroot explained.

Upgrading to Office 2010 will be a complex decision for organizations in other respects. For example, they may want to take advantage of Office Web Apps, which are versions of Excel, Word, PowerPoint and OneNote that can run in a Web browser. Currently, Office Web Apps can be downloaded and tested as beta versions, although they will be part of the Office 2010 release.

The beta tests of Office Web Apps require having volume licensing agreements in place for Microsoft SharePoint Foundation 2010 or Microsoft SharePoint Server 2010. They aren't for casual testers.

Businesses will have to pay to use Office Web Apps in one form or another. They can host them on their own servers and pay licensing costs for SharePoint 2010 or they can subscribe to Microsoft's online services. For consumers, it's expected that Microsoft will release free, ad-supported versions of Office Web Apps.

A report on the Office 2010 roadmap by consulting company Directions on Microsoft describes some of the nuances to consider. Prepare to have a beefed-up Microsoft stack in place to take advantage of Office 2010's newer capabilities, such as Office Web Apps and PowerPivot, the report warns.

"For example, the Office Web Apps and coauthoring features for group work on Office documents require SharePoint 2010, which in turn requires 64-bit Windows Server 2008 (or later), 64-bit SQL Server 2005 (or later), and a recent browser version on the client," the report explains. "Similarly, the PowerPivot feature could substantially simplify analysis of large data sets by Excel users and enable them to share their work with browser users, but its full capabilities require Excel 2010, SharePoint Server 2010, SQL Server 2008 R2, and their prerequisites."

On May 12, Microsoft will have a launch event announcing the availability of Office 2010 and SharePoint 2010 to business users. Consumers seeking Office 2010 will have to wait until the June 15 general availability date to get it. Microsoft released Office 2010 and SharePoint 2010 to IT professionals (TechNet and MSDN subscribers) late last month.

About the Author

Kurt Mackie is online news editor for the 1105 Enterprise Computing Group.

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Reader Comments:

Thu, May 13, 2010 Rick Marshbanks Chicago

THIS PROMO IS NO BUYS EVERYONE. The details of this promo fall under the Open Value Subscription license model. Which in other words, is like leasing an apartment. In that you have to pay a set fee at a set time, and at the end of the day, you end up with nothing. So yes, year 1 is 50% off - so that is like $90. Years 2,3,4,5,6,7,8,9,10.... is going to be $180. So compare that to the cost of buying a new license - do the math - and you'll see why this exclusive offering is garbage

Wed, May 12, 2010 Jerzy

Same with me regarding Open Office - it only shows, that neither of us is objective. I would not let Microsoft "anything " on my computer if they paid me - let alone me paying them. Their programs are memory hogs, Internet Exploder is a disaster, and I find Open Office so much more logical to use, but, best of all, it's stable. ================================================
Both products: MS Office and Open Office are really great pieces of software - some people prefer the first one, the other the other one. Let it be this way - don't include any personal prejudices in the process of technological assessment, which should be as objective as possible.

Wed, May 12, 2010 Jerzy

Same with me regarding Open Office - it only shows, that neither of us is objective. Both products: MS Office and Open Office are really great pieces of software - some people prefer the first one, the other the other one. Let it be this way - don't include any personal prejudices in the process of technological assessment, which should be as objective as possible.

Tue, May 11, 2010 Jim Payne Dallas, TX

At least 75% of the people I know are still on Office 2003 and some don't want to budge. Our of the other 25% who are mainly using Office 2007 don't feel like upgrading and many hate the ribbon even though I like it now after getting to spend some time using it. +++++ (@Chama Teddy - Thanks for your comments. I agree that IE can at times be a real memory hog (I think it's the Flash plug-in myself which causes the most angst) and that Office can use a lot of memory, too, but they are hardly crappy products. I find it interesting that you're reading and posting at site totally devoted to Microsoft technologies and Microsoft-focused development. And your purpose for wasting your time here with us is what exactly? Is it because you just hate Microsoft and any value it brings to the marketplace including the very existence of the Redmond Developer Network publishing franchise and the employment of the many good and smart people within that franchise? And this doesn't even include the value of the ISV marketplace that advertises within the overall franchise.)

Mon, May 10, 2010 Chama Teddy Nuevo Mexico

I would not let Microsoft "anything " on my computer if they paid me - let alone me paying them. Their programs are memory hogs, Internet Exploder is a disaster, and I find Open Office so much more logical to use, but, best of all, it's stable.

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