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MS Enterprise resellers should adapt or die

IDC warning

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IDC has warned Microsoft's enterprise resellers they will need to change their business model if they want to survive the upcoming software licensing changes.

From October, Microsoft will try to snare more companies by dropping the minimum number of computers a customer needs from 500 to 250 desktops.

The Licensing 6.0 scheme is also expected to put a more direct model in place, while ending a stack of popular upgrade options, IDC cautions.

"The implications of this on resellers that target the middle market are large, as Microsoft's strategy to lock more users into its products encroaches on their territory," according to Steve McHale, research VP for IDC's Software Partnering and Alliances program.

Microsoft wants to make the changes to the licensing agreement so it can try and sell to customers with at least 250 desktops direct or via its big account resellers, IDC says.

It adds that most of Microsoft's resellers don't know enough about licensing, and rely on distributors to explain the various vendor schemes.

"Because Microsoft is making major changes to the way its software is fulfilled, IDC believes channel players that provide marginal value better get ready to change their business models quickly," it warns.

"The current initiative affects midsize accounts, but Microsoft is sending a clear message about what constitutes value, and other software vendors are likely to follow suit in the near future," McHale says. ®

Turn on to Channel Flannel, our section for reseller/distie and system builder stories.

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