Microsoft may launch new Office cloud license

Microsoft Corp. may be close to adding a new way for big businesses to buy Microsoft Office.

Under a new license called “union,” Microsoft would charge enterprises the same for software whether it is hosted on-site or in the cloud, according to a report in SDTimes earlier this week that quoted unnamed Microsoft channel partners who had been told of the program. No prices were listed.

The new license would help reduce complexity for large companies with workers with widely varying degrees of software usage. Heavy and regular users of a Microsoft app might require an on-premise server version, while light users can make do with a hosted version from Microsoft.

SDTimes said the union license would either apply to Microsoft Office run locally and hosted on the just-launched Windows Azure, or to Exchange and SharePoint, which Microsoft offers in software and hosted form. The latter is via Microsoft's year-and-a-half-old Business Productivity Online Suite (BPOS).

Microsoft did not reply to a request for comment.

Paul DeGroot, an analyst with the independent research firm Directions on Microsoft, said “union” could be a new bundle that combines Office 2010 (on-premise) with Office Web Apps and, to store the data from the latter, SharePoint Online.

This would allow Microsoft to maximize its revenue without driving customers toward cheap and free solutions such as Google Apps, Zoho and VMware's recently acquired Zimbra e-mail app.

“So in an effort to have it both ways, Microsoft may ask the customer to pay for both ways, license plus subscription,” DeGroot wrote in an e-mail. “My view is that both the economics (buy an expensive product so you can use a cheap one) and practicality (one user working across the feature sets of two doc creation apps) of that is unattractive, and the risk is that very few customers will take them up on that offer. That would not be good.”