Microsoft Changes Pricing Model

  • September 12, 2022
  • 2 min read

Microsoft changes pricing model in big news this week. New draft legislation that might have significant implications for Microsoft and other major software vendors is being prepared for submission by a Democrat senator.

The proposal would establish new conditions under which software firms are permitted to sell to customers in the federal government. The claim is according to a report from Bloomberg, which had access to the material.

The legislation would specifically require a certain level of interoperability across competing services. It forces vendors to switch from a per-employee pricing structure to limitless licenses.

 

Microsoft changes pricing model: pricing policies for software

The final draft of the measure is still being polished and might alter. The basic goal, however, will stay the same: safeguarding the federal government against needless overspending on collaboration, ERP, and other technologies.

According to data from Statista, the US Government has allocated about $60 million for IT spending this year. This is excluding the budget for the Department of Defense. However, data from 2014 indicates that a sizeable portion is probably squandered on extra licenses and fines for violating conditions of use.

Congress has already proposed new regulations in an effort to address this problem. However, the new draft measure would go further protection by focusing on the licensing structures that the government frequently abuses.

The bill would protect agencies from the types of fines they face when use limitations are exceeded. This is done by requiring suppliers to switch from a per-seat model to unlimited licensing. It would also remove barriers caused by a lack of interoperability across competing services.

After the draft is finished, the legislation will still need to be approved by Congress, but Bloomberg believes that having Senator Peters, the chair of the Senate Homeland Security and Government Affairs Committee, as a sponsor will improve the likelihood of success.