How Microsoft Sell Software?

Microsoft is one of the company that has a good experience on selling software. Starting from Windows 1.0 till Windows 8, Microsoft has a good model to sell its software. This post will cover a basic understanding how they sell they software, in order to get idea how you will be sell your software.

Free software at Microsoft

Beside sell a software, Microsoft provide free or shared source software. Free software can be installed for any user. the free software sometimes provide shared source licensing. Shared source licensing is a model when Microsoft share the source code. Shared source is just like open source with several constraints like intellectual property. In several events, Microsoft gives his customer NFR (Not For Resale) license. NFR is a commercial product that given by Microsoft for free. 

Two different target

There are two different target of Microsoft Software which are consumer and an organization. Consumer focuses in end user solution with affordable price tag while organization focuses in volume users with competitive price tag.

Two ownership model

Both consumer and organization can buy Microsoft software through two models which are subscriptions and perpetual model.

Subscription is cheaper than buy out but need commitment from the consumer/organization to pay it every year. The subscriptions provides the latest update for many Microsoft software. One of the benefit of this ownership model is software assurance (SA). SA means that consumer or organization doesn’t need to buy new license when the new software comes out in their subscriptions timeframe.

Perpetual model is sell a software in retail way. Consumer or organization can pay for the software that they need and pay for one time only. There are no Software Assurance for this model but many promotion that can be accessed to get latest version of software without hassle. For example upgrading your Windows 7 to Windows 8 for just 17,99$

Two perpetual packages model for consumer

There are two model for consumer which are OEM (Original Equipment Manufacturer) and FPP (Full Package Product).

OEM is a license that combined with hardware. Frankly speaking, consumer can only get this model by buying new hardware. OEM is preinstalled software like Windows on your new notebook. it cheap, but it cant be moved from one device to the others. 

FPP is a retail license. Consumer can buy directly this model. FPP provides full package product that can be moved for many devices according to its license. FPP focuses in flexibility. Some FPP can be used for several devices based on same serial key. This technique is called as Multiple Activation Key (MAK). 

Two subscription packages for consumer

The consumer can subscribe a Microsoft product if he is engineer like developer or IT professional. The subscription provides full access of Microsoft product but it is only for their Research and Development purposes. Developer can subscribe MSDN (Microsoft Developer Network) Subscriptions. IT Professional can subscribe TechNet. In this kind subscription, Microsoft is really flexible. It is because that this subscription model is dedicated for innovation and implementation of Microsoft product.

Two perpetual package for organization.

Organization can buy Microsoft product in two ways which are single license/FPP like casual consumer and volume license. Single license is just like perpetual package model for consumer. Volume license can be bought by an organization if he bought at least 5 license. It has different price scheme and definitely cheaper. The volume license itself different in term of organization type. Volume license for Academic, Government, and Commercial has different price and different model.

Subscription model for organization

Organization has many domain that sometimes different from one to the others. Therefore, Subscription model for organization is somewhat different. Microsoft provides three scheme which are Education organization, government, and commercial. Education and government provides the most cost effective solution. You can learn more at http://www.microsoft.com/licensing/ 

Two modern approach in store era

Windows 8 is shipped with Windows store, Windows store provides you free application with ads or bought it with competitive prices for a lifetime. Store focuses in long tail economy, where the software is competitive in term of price and functionality. Take a look my previous post about how to sell in Windows 8.

 

ciao, @ridife

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About @ridife

This blog will be dedicated to integrate a knowledge between academic and industry need in Application Lifecycle Management (ALM), ICT tips, and Software Engineering Research. Enjoy this blog and let's get in touch in any social media.

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