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Microsoft Online Services Agreements Now Restricted to One-Year Terms

Organization now can only establish Microsoft Products and Services Agreements (MPSA) for a one-year term.

As of this month, Microsoft eliminated the ability to get MPSAs for multiple-year spans. The stated rationale for the change, as described in an announcement this week, is that Microsoft wanted to align its subscription durations for the MPSA to be similar to the durations of its Cloud Solution Provider and Microsoft Online Services Program -- in other words, it's keeping the terms similar for its "cloud" service offerings.

Now, new MPSAs, as of this month, can only be for one year or less.

"As of April 1, 2017, the multi-year duration options for Office 365, Dynamics 365, Secure Productive Enterprise, and all other online services subscriptions* will no longer be available through the MPSA," Microsoft's announcement explained.

Essentially, Microsoft just licenses its services for one-year terms or less with this MPSA change. That idea is illustrated in the following table:

[Click on image for larger view.] Service agreement terms as of April 1. Source: Microsoft blog post.

There's one exception to the one-year MPSA stipulation, namely Microsoft's Windows E3 subscription option.

"Windows E3 is available only as a three-year subscription through the MPSA, and continues to be available after April 1, 2017," the announcement added, in a footnote. The reason for the exception wasn't explained.

In addition, Microsoft's change this month doesn't affect previously established multiyear MPSAs. Microsoft indicated that "users can continue to be added to those subscriptions with same service end dates."

The MPSA change will "make buying choices easier," Microsoft's announcement claimed. The change was driven by Microsoft's so-called "modern licensing" effort. Microsoft uses the "modern" label quite a bit for its various software products, and it's really not clear what it means. However, Richard Smith, general manager of commercial licensing at Microsoft, had previously described Microsoft's modern licensing effort as being associated with purchasing changes. He said that some customer want to buy licensing direct from Microsoft, while others want value-added partner offerings. Still others prefer "self-service" purchasing, Smith had explained.

In December, Microsoft killed a new MPSA offering called "Enterprise Advantage" that offered a three-year term. It, too, supposedly emerged as part of Microsoft's modern licensing effort before it got axed.

If an organization wants to establish a multiyear agreement, Microsoft pointed organizations to use its Enterprise Agreement option. An Enterprise Agreement is available for a three-year term.

A couple of Open licensing programs also offer multiyear terms, such as Open Value (three years) and Open License (two years).

About the Author

Kurt Mackie is senior news producer for the 1105 Enterprise Computing Group.

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