Microsoft Drops Office Pricing; Boosts Licensing Program

Thursday May 29th 2003 by SmallBusinessComputing.com Staff
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Microsoft is dropping the prices for its Office XP suite of business software and other individual programs by about 15 percent. The company also said it will provide free technical support to businesses that receive software upgrades under the company's controversial Software Assurance licensing program.

Microsoft this week announced changes to the pricing of several products in its Office XP family of business productivity programs. The price cuts are designed to give home office and small business customers improved purchasing options that help address both business and economic needs. This reduced pricing for full package products comes at the same time that Microsoft is enhancing its Software Assurance offering for businesses that purchase Microsoft Office through Volume Licensing.

"Microsoft is reducing the retail pricing of Office XP as its commitment to make it easier for small businesses to obtain the productivity suite," said Joe Eschbach, corporate vice president of the Information Worker Product Management Group at Microsoft.

Microsoft is reducing the estimated retail price of Microsoft Office XP Standard and Microsoft Office XP Professional by approximately 15 percent. The drop in Office XP pricing comes as the software giant readies its newest version, Microsoft Office System 2003, for release later this year.

Additionally, Microsoft is reducing the estimated retail price of stand-alone applications, such as Word, Excel, PowerPoint and Access 2002 editions by approximately 30 percent. This means small businesses that buy retail will save about $80 to $110 on original retail prices, depending on the products purchased.

Microsoft also has announced key enhancements to its Software Assurance offering. The company will provide all business customers that buy into its Software Assurance program with training, support, and deployment and management tools.

The Software Assurance program requires businesses to sign up for long-term contracts to receive automatic upgrades — or potentially face big price increases when they do seek upgrades. The move angered many businesses and government agencies and spurred some to consider switching from Microsoft applications to rival software solutions.

The new Software Assurance features, which vary by licensing program, include specific benefits for Office customers — in particular, employee home-use rights for Microsoft Office System products. With home-use rights, employees may install Microsoft Office Systems products on their home computers for both business and personal needs. Home-use rights provide added flexibility, especially for telecommuters. Microsoft Office System products include Microsoft Office Suite, as well as FrontPage, InfoPath, OneNote, Project, Publisher and Visio.

The enhancements to Software Assurance will be available in September 2003.

Problematic Windows XP Update Pulled
In related news, Microsoft late Tuesday withdrew a Windows XP software update after thousands of users complained the patch was blocking Internet connectivity.

The Windows XP update, first posted on May 21, was issued to enhance the functionality of the Layer Two Tunneling Protocol (L2TP) and Internet Protocol security (IPSec) on PCs running Windows XP or Windows 2000.

It was issued to deal with changes to the way IPSec encryption was used by PCs behind firewalls and to better support virtual private network (VPN) clients behind network address translation (NAT) devices. The update also included additional support for stronger IPSec protection by using the 2048-bit Diffie-Hellman algorithm, the company explained.

However, about half a million users who applied the fix via the operating system's automatic Windows Update feature complained that it blocked Internet connectivity and Microsoft was forced to yank the update.

It is not the first problematic patch pulled by the software giant. In February, Microsoft withdrew a security fix for Windows NT 4.0 systems because it introduced an error that caused systems to crash.

The problems of faulty patches is a public relations nightmare for Microsoft, which has gone to great lengths to implement its Trustworthy Computing initiative.

In the past, security experts have scolded sysadmins for failing to apply security patches in a timely manner but the recurrence of faulty patches has added to the conundrum.

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