March 5, 1997

VOLUME DISCOUNTS ON SOFTWARE: YES, YOU CAN

Big corporations typically purchase software in volume, qualifying for hefty discounts over off-the-shelf prices. But those discounts have traditionally been off-limits to small companies that have no need for the 50 or 100 programs required for an entry-level volume-purchase agreement. Now, tradition has been broken. If you think your company, with its 10 or 15 computers, is too small to qualify for volume discounts, think again.

Over the last several months, software publishers such as Corel, Microsoft, and Lotus have revamped their volume pricing plans to make it easier for small businesses to qualify for discounts. Not only have they reduced the amount of software you must buy to get a good deal but they've also removed a lot of the packaging as well. To wit: You no longer have to buy documentation and a CD-ROM for every copy of software you purchase.

In a (somewhat) simplified version of their standard licenses, publishers are instead offering so-called "open" licensing plans that allow you to purchase a single package and distribute the software to multiple computers. (Companies that opt for open licensing often fashion their own documentation libraries; employees borrow manuals when they need them.)

Naturally, these plans aren't as simple as they sound. Microsoft, for instance, assigns units to its packages: Microsoft Office is worth two units, the NT operating system, one. In earlier days, to qualify for a volume discount, you would have had to buy 50 units worth of software. Now, to qualify for the Microsoft Open License Program (MOLP), you need buy only 20 units -- which translates to just 10 copies of Microsoft Office.

If you buy the software from a reseller such as ASAP Software Express, in Buffalo Grove, Ill., the discount will range from 25% to 35% off the full packaged-product price. (Percentage discounts vary from reseller to reseller and product to product.)

Purchasing software for 10 employees? Your MOLP purchase will get you a single full product -- documentation and all -- and the right to distribute Office to nine more computers. For the next two years, you can order any Microsoft product, not just Office, in quantities of 10 units, all at a discount.

To get a really good discount, you need to know a bit more:

* Competitive upgrades are a good deal. The major business software publishers are trying to wrestle market share from each other by giving you an incentive to switch (just like the long-distance phone companies). Say you have 10 copies of Lotus SmartSuite and you're thinking of upgrading. Switch to Microsoft Office -- and Microsoft will give you a 40% discount. Upgrades are more widely available than you may think, because most computers come bundled with software that typically qualifes for one.

* Upgrade discounts are also sweet. Lotus will offer you a hefty discount for staying with it -- just as Microsoft would if you upgrade from even the most ancient version of Microsoft Word, for instance, to any other Microsoft product. In its open license program, Microsoft will even allow you to combine an upgrade and a competitive discount, if you happen to be starting with a handful of copies of Lotus and a bunch of Microsoft products.

* Discount programs differ significantly. Corel, for instance, provides a discount starting with one copy, if you sign up for its Choice program, says Gartner Group analyst Karl Strovink. Choice also provides so-called "concurrent licensing." Say you need some software that your staff will use only occasionally. With a concurrent license program, you can pay for five licenses and install the software on 10 computers, provided that no more than five people use the software simultaneously.

Confused? If the discounts sound good but the complexity daunting, you might consider purchasing through resellers such as ASAP Software Express or Software Spectrum in Dallas. Not only do resellers usually shave a few dollars off the list price, but they'll manage your program for you, offering what they think are the best combination of licensing options and upgrades. And they keep track of what you've purchased, so that it's easier to buy upgrades when new versions are published. Moreover, they'll keep a tally of your software licenses, so if the Business Software Alliance or the Software Publishers Assn. comes to call, you've got an ally, with complete records that these "software police" consider verification of legality.

MOLP, which has been available since October, has been so popular that Microsoft claims its sales to small businesses have doubled. ASAP Software's small-business sales have zoomed 105%, compared to its overall growth of 48%. But you may need to educate your local software retailer: Microsoft's Sam Jadallah, vice-president for sales and marketing to small- and medium-sized businesses, says only about half of its thousands of resellers have sold MOLP. "We have a lot more that can learn about it," he says. "We find when someone understands the program, it becomes a very successful program."

For more details on open license programs, check out Microsoft's Web site at http://www.microsoft.com, or visit Corel on the Web at http://www.corel.com and follow the links to its Choice program. At this writing, Lotus (http://www.lotus.com) doesn't provide open licensing info on its Web site, but it does give you a linked list of resellers from whom you can purchase licenses.

So if the clerks at your local computer store haven't heard of open license programs, now you'll be armed with information. A little education can mean a lot to your software budget.

By Elaine Appleton in Newburyport, Mass. Appleton writes about technology from Newburyport. She is a former senior editor of Datamation magazine.
Edited by Fred Strasser