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Commitment To Enterprise Customers

Microsoft Steps Up Commitment To Enterprise Customers And Delivers Software As A Service

Changes Mean Simpler Upgrades with New 'Software Assurance' Program and First Subscription Offering for Volume License Customers

AUCKLAND, New Zealand - May 11, 2000 -Microsoft today announced simplifications to its volume licensing program, including a new Enterprise Agreement subscription offering an easier way of upgrading, and broader access to Enterprise Agreements for mid sized companies.

The changes to its licensing options are the latest in a series of improvements Microsoft is making to its products, support, consulting services, and business operations to better serve the needs of enterprise customers.

Microsoft New Zealand's Director of Sales and Marketing, Ross Peat says that Microsoft is committed to making it less complex and more cost effective for large and mid-sized companies to upgrade products such as Windows® Professional and Server, Office, the .NET® Enterprise Servers, and other enterprise products. He says the new upgrade offering called 'Software Assurance' (SA) provides customers with the rights to upgrade to the latest versions of products released during the term of their agreement.

"Customers have told us that they want greater licensing flexibility and choice as well as simpler licensing options that makes their software assets easier to administer and ensure compliance," said Peat. "Our new program provides common offerings with a common pricing methodology, backed by new online tools that will simplify the administration of licensing and lower the total cost of technology ownership for the majority of our customers."

"Software Assurance replaces the sometimes confusing collection of upgrade licenses programs offered to enterprise customers today, including Version Upgrade (VUP), Product Upgrade (PUP), Competitive Upgrade (CUP) and Upgrade Advantage (UA)."

Peat said the licensing changes outlined today also introduce flexible offerings that are responsive to the specific needs of different customers, supporting per-license or enterprise-wide purchasing, with a choice of traditional (perpetual) or subscription (non-perpetual) rights.

"Customers and analysts have told us that licensing programs should be judged on whether they are simple, easy to administer, predictable, controllable and measurable. They say licensing should be independent of a particular technology, and provide a fair relationship between price and value," noted Peat. "Microsoft's new licensing program meets each of these criteria head on."

"Microsoft is also making its Enterprise Agreement option available to more companies by lowering the minimum number of desktops from 500 to 250 PCs. This means that more New Zealand customers will benefit."

Subscription Licensing A long-awaited improvement to Microsoft's Volume Licensing program is the addition of a subscription license option for Enterprise Agreements, designed for companies that prefer to spread their licensing costs over multiple years. The subscription offering is easy to administer as it only requires that companies do a simple year-over-year count, and because renting software may provide some tax advantages in certain countries.

"We are pleased that Microsoft has added a subscription option for its Enterprise Agreement program," said Harry Clough, Head of Management Services Nestle, a Microsoft Global Account. "We believe that licensing by subscription is the most cost-effective way for Nestle to license software across our organisation around the globe and assures us quick access to the latest enterprise products from Microsoft that will help our company be more competitive."

Software Assurance A key simplification in the new program is the replacement of the confusing 'alphabet soup' of upgrade options with the streamlined Microsoft Software Assurance offering, which can be purchased for individual machines or for all PCs within an organisation.

Microsoft Software Assurance provides upgrade rights to the latest versions of Microsoft products released during the term of the agreement. Companies that choose Software Assurance for all PCs in their organisation will be automatically enrolled in 'Software Assurance Membership'. This means they will enjoy a range of additional benefits, including the opportunity to input on changes to products and future product function; access to custom hot fixes related to a customer's specific environment; a special, online software update service; and special profiling of customer software investments and implementations.

Through the Software Assurance program, Microsoft volume license customers will be able to quickly benefit from the very latest enterprise software and the improvements in reliability, flexibility and productivity that it can bring.

License changes may drive cost down for some customers The improvements to Microsoft's volume licensing program are designed to match the current purchasing behaviour of the majority of Microsoft's enterprise customers, and should result in licensing cost reductions or no change in licensing costs for the vast majority of Microsoft's business customers.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries. Other product and company names referenced herein may be trademarks of their respective owners.

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