The new licensing plan is called “Software Assurance” and applies to users such as companies and government agencies, which licence software in bulk. It marks the end of Microsoft’s current volume licensing deals that allow users to upgrade software on a trade-in basis.
Software Assurance aims to move Microsoft’s customers to multi-year agreements. The plan is similar to insurance policies. Users will have to pay a premium each year, that will give them the right to buy software upgrades during the contract term (2 or 3 years). The premium will be 25% or 29% of the original cost of the software, depending on the product.
From 1st August, customers who don’t subscribe to the new licensing plan will have to pay the full price of a Microsoft software product when they want to upgrade to newer versions. According to Gartner estimates, this could be up to 45% more.