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Developments such as virtualization, mobile devices, and cloud computing have all forced MS ® to modify licensing terms. Of course Microsoft ® has a large organization that focuses solely on Volume Licensing, but their role is to collect and combine disparate requirements rather than dictate a cohesive global licensing program.Ĭhanges in technology also contribute to the complexity of licensing.

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Even the Windows ® and Office business units in Redmond operate very independently of each other. The reality is that Microsoft ® already operates as multiple companies they just share the same name. There have been times when critics and competitors have suggested that MS ® should be broken into multiple companies, accusing them of collaborating between divisions, thereby giving the company an unfair competitive advantage. This may be due to competitive influence, product localization schedules, or regional technical capabilities. An MS ® subsidiary in a particular country may elect to market and price certain products differently than elsewhere. Microsoft ®’s culture has traditionally been one in which employees and divisions have the autonomy and authority to make many of their own decisions. From an external perspective that may seem illogical, but the decision making at Microsoft ® is often decentralized. Microsoft ® is not a company that is strictly managed from the top down. It would be nice if all of those products in all of those languages could be licensed and managed by a single set of rules, but the culture and business model at MS ® prevents that from happening.

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Today, the Volume Licensing Service Center (VLSC) provides download access to current (N) and the previous version (N-1) of products although customers may still order physical media (CD/DVD) through the VLSC.

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Microsoft ® continued to update the Welcome Kit quarterly until 2009 when it contained 255 CDs for English language alone.

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There were a total of eight CDs in the first Welcome Kit (including Mac Apps). The first Welcome Kit contained approximately 30 products in as many as eleven languages although that number is artificially high by today’s standards because utilities such as Spell and Thesaurus were considered standalone products at the time. As with today, there were three product pools: Application, System, and Server. The deliverable was a “Welcome Kit” which contained CDs with images to enable the user to create 3.5” or 5.25” diskettes as well as a utility to enable network installation. The plan was to ship every business related product in every language to corporate customers and let them select which ones to use and on how many systems, then report usage back to MS ®. In 1993 MS ® introduced the Microsoft ® Volume Licensing Program or MVLP as it was known at the time. Prior to that time customers had to purchase multiple finished goods packages and retain proof of purchase for each unit. OEM royalties from MS-DOS ® and subsequent products funded the company for many years that followed and still represent a substantial percentage of revenue today.īy the early 1990s when Local and Wide Area Networks were becoming more common, corporate customers began demanding some sort of licensing programs for MS ® software. They also believed that by licensing their OS to multiple OEMs, they would create a market and industry standard with which no one else could compete.

Bill and Paul believed that if PCs were as successful as they hoped, the sum total of multiple OEMs would even exceed the size of IBM ®. They managed to close the deal without exclusivity. Bill Gates and Paul Allen believed that in spite of IBM ®s dominant market presence, the potential market for personal computers would far exceed that of even IBM ®s enviable reach. IBM ® was a huge company and securing a deal with them could make or break Microsoft ®. IBM ® wanted an exclusive agreement which would prohibit MS ® from licensing the OS to anyone else. This was not only significant because it represented the company’s first big break, but also because of the terms of the agreement.

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Microsoft ®’s business model is based upon software licensing, which dates back to licensing MS-DOS ® to IBM ® in 1980. I’m not going to defend it but I will attempt to share some insight into the history and some of the factors that lead to the challenges we face when trying to interpret VL today. Anyone who is even remotely familiar with Microsoft ®’s Volume Licensing knows how complex and confusing it can be.