Microsoft's Windows and Office "Rental" Licenses Make No Sense

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Microsoft is introducing new licenses—or, to be precise, license caveats—for Windows and Office software, which would require anyone who rents PCs with the software, like internet cafes, to pay an extra fee. But why now? Or really, why ever?

The issue is almost as old as Windows and Office, and it's been handled a certain way for a very long time. At least, according to Microsoft:

Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party. As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafés, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements.
Rental Rights are a simple way for organizations to get a waiver of these licensing restrictions through a one-time license transaction valid for the term of the underlying software license or life of the PC.


Now, anyone who rents a PC with Windows of Office—like an internet cafe, or a Kinko's—has to pay a licensing fee, at about $58 for Office Pro, $45 for Standard and $23 for Windows. (These numbers will rise by 30% after an introductory period.) The obvious problem here is that for years, Microsoft had totally fostered illegal behavior: they wrote their license agreements in such a way that there has been no legal way to rent PCs with their software, despite an obvious need for this. Very large companies who would have bent to whatever demands Microsoft asked for didn't have any demands to bend to, and just did what everyone else was doing—they ignored the EULA.

But as weird as this system of salutary neglect was, there was a sort of twisted logic to it. Endorsing an effectively unlimited number of users is a precedent that Microsoft probably didn't want to set, even if, in this specific scenario, it was something that didn't want to ban outright, either. So why, in 2010, is Microsoft suddenly asking everyone to pay up?


As far as I can tell, there are two possible explanations for this:

Money. For the large companies that have to be careful about licensing their software correctly, like Kinko's, but who also need Microsoft products on their PCs to offer the core services, like Kinko's, these new offers will provide Microsoft with a raw, juicy cash injection. It'll be mixed with ill will, sure, but this could really add up.


Lawyers. It's also possible that someone in Microsoft's army of lawyers decided that their admittedly odd prior arrangement was somehow untenable, and that it could screw up some other Microsoft offer, present or future. This seems more likely to me, but it's still a pain in the ass. Essentially, this would be Microsoft's licensees paying for their old legal mistake, which is generally shitty. But who knows!

Either way, this comes as a very expensive surprise for people who had the best of intentions, which, even if it doesn't affect me directly, leaves a bad taste in my mouth.


[Microsoft via CNET]