Microsoft asks channel to suggest payment options

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 License 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
mediums 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 the
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 Feb 2008,
while it will be made available in India 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. “These rapid deployment programs are
our way of getting our channel ready for the job of selling the 2008 products,”
said Kathuria. Some of these partners will also be roped in to train the next
set of 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 admitted that infrastructure upgradation was not
an easy task, she did not think that product 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.