Here’s an interesting switch, a UK company is suing Microsoft over their licencing rules for Office. Usually it’s Microsoft suing others about licences, not the other way around.
ValueLicensing is claiming UK₤270 million (US$370m ) in damages from Microsoft for trying to squeeze out the second-hand licence market.
Organizations that upgrade their software licences, are downsizing or closing down have unused Office, Visio and Project licences that can be sold. Sellers get money for an asset they don’t need, buyers get licences for less. There’s good money to be made by everyone involved in the 2nd-hand software licence trade. Sellers, middle-men and buyers all benefit, the only party that misses out is Microsoft.
ValueLicensing acts as a middle-man for second-hand licences across the UK and Europe. They claim a UK National Health Service Trust saved over ₤1m (US$1.35m) buying 4,800 Office 2019 Pro Plus licences.
Licences transfers are possible for the single-payment ‘perpetual licence’ versions of Office such as Office 2019/2016 and the upcoming Office 2021 and Office LTSC. It’s not possible for subscription plans.
ValueLicensing is suing Microsoft over their polices which limit (‘short-change’) perpetual licence customers. Those policies greatly reduce the value and availability of second-hand Office licences.
Half the support for Office 2021 and Office LTSC
Support for Microsoft Office perpetual licence products was a full ten years according to Microsoft’s own ‘fixed lifecycle’ policy. But that ‘fixed’ policy was ignored for Office 2019 which has only seven years of support.
Office 2021 & LTSC releases will only get five years of support – half of Microsoft’s supposedly ‘fixed’ policy. The reduction is just part of Microsoft’s real policy of not wanting to sell perpetual licence software at all and pushing customers to annual payment plans. The halving of support is especially outrageous for Office LTSC which will be 10% more expensive than Office 2019.
Office 2019, Office 2021 and Office LTSC software will continue to work after support ends. However, most organizations are reluctant to use software that doesn’t have regular security patches.
Microsoft is harming competition
In an interview with the Financial Times (firewalled), ValueLicensing’s founder, Jonathan Horley, said Microsoft is harming competition in the pre-owned software market by letting companies relinquish their perpetual licences, perhaps in exchange for discounts on Microsoft’s ‘subscription’ software, such as Office 365.
“Microsoft has an incentive to move to its new cloud-based model and remove the old licences from the market so customers have no choice but to move to its subscription model.”
Owners of software licences are seeing their value drop, as the resale market shrinks. Mr Horley accused Microsoft of “abusing its power” and of limiting companies options for cheaper software.
Microsoft has no comment on ‘ongoing litigation’.
It will be interesting to see how far this case gets and the result. If nothing else, it helps to highlight the massively reduced support available for single purchase Office.