Partners to Microsoft: Don't Make Us Licensing Police

Microsoft partners think it's great that the vendor has been aggressively battling software piracy. But some partners say the task of ensuring that their clients are in compliance with Microsoft's Byzantine software licensing structure is steadily growing more difficult.

Making matters worse, several sources told CMP Channel that Microsoft sometimes expects partners to act as foot soldiers in its ongoing campaign against so-called 'unintentional' software piracy by reporting organizations that aren't in compliance, which is threatening their role as trusted advisors to their clients.

Microsoft licensing has numerous wrinkles and is notoriously complex, which means it's easy for users to violate the terms, says Scott Braden, senior Microsoft analyst at Miro Consulting, Fords, N.J. "Microsoft's reps usually only have to ask a few questions about how you're doing things in order to tell you that you're doing something illegal," said Braden.

While Microsoft doesn't explicitly require partners to act as enforcers of its licensing terms, solution providers say there have been cases in which they've been pressured by Microsoft to blow the whistle on software license violators.

"My concern is always being placed into the position of 'licensing police'," said one Gold level partner. "While we will never sell or recommend nor implement any level of piracy, as the customer's trusted advisor, we cannot be placed into the position of enforcing a vendor's licensing."

Some solution providers feel that Microsoft hasn't been clear enough about whether partners would be held liable in cases where their customers are caught using improperly licensed " or pirated -- software.

"The scenarios we worry about are things like customer acquisition: If we pick up a new customer and they aren't licensed properly, and we support them, what would happen?" said the source.

"I believe it's the customer's responsibility to use the software correctly, and mine to advise them, but would Microsoft come after us in this scenario?" added the source.

A Microsoft spokesperson said the vendor's license agreements state that the customer holds responsibility for their software acquisitions and license compliancy.

Microsoft's licensing rules have grown more complex with the release of Windows Vista and the vendor's introduction of new licensing terms for certain core products, according to solution providers.

Next: VARs Face Compliance Pressures

With the launch of Exchange 2007 last year, Microsoft added a more expensive Enterprise client access license (CAL), and then forced customers to buy it in order to keep basic mailbox management features that were originally part of the standard CAL. Although Microsoft backed off the decision in June, it has yet to do so for a similar policy governing Outlook 2007 e-mail client licensing provisions.

"I'm concerned about the new products that require one CAL for [a basic] level of functionality and a second CAL for an enhanced level of functionality," said another Microsoft Gold partner who asked not to be named. "I think this model will be confusing for consultants to understand, and there are limited governors in the software that would assist in enforcement."

"Microsoft understands that licensing should be a conduit for customers to acquire technology to move their business forward, not a separate hurdle that they and their solution provider must overcome," said a spokesperson for the Redmond, Wash.-based vendor.

"Enterprise CALs were added to allow more flexibility in purchasing. They provide incremental and unique functionality that capitalizes on existing server investments," said the Microsoft spokesperson.

Braden notes that Microsoft in the past has given its large account reseller (LAR) and enterprise partners soft quotas for the number of licensing compliance violations they're required to report each year.

"It's fair to say that as a Microsoft partner, you're expected to look out for their interests, and part of that would be to watch for licensing compliance issues," said Braden. Recently, Microsoft has been encouraging some of its leading resellers into getting trained on the finer points of monitoring licensing compliance, he said.

The hard line Microsoft takes on software piracy can often have a trickle-down effect in the channel, forcing partners to devote valuable time to software licensing issues, Braden adds. "I can understand the reasons why Microsoft wants to do activation and key management, but it makes things tough, especially for small and medium partners," he said.

Microsoft's tough stance on software piracy can also raise ethical issues for the VAR-client relationship. In cases where partners have non-disclosure agreements with Microsoft as well as with their own corporate and government clients, the decision over whether to report licensing violations becomes exponentially harder, says Braden.

"The big question in these cases is what do you do if two NDAs are in conflict? In my experience, it comes down to making a judgment call and working carefully with the account management team," said Braden. A Microsoft spokesperson said the vendor's NDA doesn't require partners to provide any information about their customers to Microsoft.

Matt Scherocman, vice president of consulting services at PCMS IT Advisor, a Cincinnati-based Microsoft Gold partner, isn't aware of cases in which Microsoft has cracked down on partners that have exercised reasonable due diligence with regard to piracy.

"I find that most customers want to be license-compliant, they just need some education to be able to learn what the rules are," said Scherocman.

Still, in light of the five different versions of Windows Vista that Microsoft offers, and the fact that some versions can only be obtained if the customer also buys Software Assurance, the licensing conundrum seems likely to continue for Microsoft's customers and partners, says Braden.

"It's going to get even worse when people start rolling out Vista at the enterprise level," Braden predicted.