Microsoft wants channel to suggest payment options

Mumbai

November 27th, 2007

Just a few weeks ago, Microsoft India extended its FlexGo service, which
allows customers to pay on the basis of the number of hours they use a PC with
its OS installed on it, to India. Then it offered customers the Open Licence
Value, where customers can pay one-third price of the software on a yearly
basis.

Now the company is asking partners to suggest other payment medium that will
help it combat the threat from open source as well as piracy. While the piracy
levels are very high for its desktop software, even server products are not
exempted from this menace, though it is relatively lower.

"Unlike the desktop versions, it is not possible for us to crack down on it
using aggressive means, as the abuse is not very high," said Pallavi
Kathuria, Director, Server Business Group, Microsoft Corporation India.

Microsoft employs its 3-E rule for dealing with piracy - enforcement,
education and engineering. Enforcement is not likely for the server software
business, while education is already underway. Now the company is working on
engineering, wherein a company will not be able to add any more PCs than the
number of licenses it has signed up for, to the server.

In the meanwhile, the company executed a different payment option in
Malaysia, where it tied up with a financial institution and let customers buy
the OS for a zero percent interest rate on their credit card. Microsoft Capital,
the vendor's financial division, undertook the project.

Currently Microsoft Capital is not present in India, but Kathuria is trying
to negotiate with banks in the country to see if a similar mechanism can be
rolled out in the country as well. "People are right now buying high-value
goods from consumer electronic shops that offer zero percent interest, on an EMI
basis. We would like to explore if we can replicate this in the software space
as well," she said.

This is just one of the finance options the company is looking at for getting
more people to buy genuine software. It now wants the channel to come up with
some suggestions on other finance modes to encourage this anti-piracy drive.

In the meanwhile the company is getting the ground ready for rolling out its
2008 products. These include the 2008 versions of Windows, SQL and Visual
Studio. Globally this suite of product will be launched in February 2008, while
it will be made available in March 2008.

The company is currently working with some select partners for deploying
these products at 10 Indian customer sites, besides four global customers who
are based in India as well. The idea is to acquaint partners with the product,
its advantages while implementation, understand how to integrate it with the
existing network and develop applications based on it.

"These rapid deployment programs is our way of getting our channel ready
for the job of selling the 2008 products," said Pallavi Kathuria. Some of
these partners will also be roped in to train the next set of the channel as
well. According to an IDC survey, for every $1 of software deployed by a
customer, a partner can generate income of $18 from it.

Once the products are launched, Microsoft will offer training, both pre and
post-sales, to its channel, which comprises independent software vendors,
systems integrators and value added resellers. This apart, it will invest in
activities to create awareness and conduct lead generation programs as well.

However, constant upgrades are something that the channel or users are
increasingly becoming skeptical about. Typically a company spends 18 months
testing, planning and piloting before undergoing large-scale deployment. If an
upgrade it announced then the company is in a dilemma of continuing with its
existing infrastructure rollout or opt for the newer solution.

While Kathuria admits that infrastructure upgradation is not an easy task,
she does not think that products updates make the life of a CIO that difficult.
"A customer can always go for a phased upgradation plan. This means that if
he is going for a new web server then he can consider the new 2008 versions
rather than ripping and replacing his entire network," she said.

For the 2008 launches, Microsoft will work with partners to conduct client
assessment checks to see which of their current applications can run on the new
versions. Only then will it recommend that customers move to the updated
products.