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  Microsoft licensing: How does it work?
Time: 05:59 EST/10:59 GMT | News Source: CNET | Posted By: Alex Harris

Microsoft revamped its licensing programs on May 10, 2001, and as a result, changed the way the vast majority of companies and organizations acquire Microsoft software and upgrades. Here's a primer:

The old program: Previously, companies bought software licenses for each desktop and then picked up upgrades on an as-needed basis. Software upgrades cost about 59 percent to 72 percent of the original license. Typically, customers upgraded operating systems or applications every three to four years.

Software Assurance: Under the new plan, which is available to participants of Open and Select volume licensing programs, companies pay an annual fee that gives them the right to upgrade each desktop for a specified number of years, usually two to three. The fee is 29 percent of the initial license for desktop software and 25 percent for server software.

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