Microsoft OKs Partners to Rent Out Software

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Microsoft quietly announced at the beginning of the year that it will finally begin renting out some of its software via its partner network.

However, for those already bewildered by Microsoft’s (NASDAQ: MSFT) complex licensing terms, don’t expect that to get any easier with the change.

“As of January 1, 2010, Rental Rights license SKUs were added to the worldwide Microsoft Product List for Volume Licensing, Microsoft Product Use Rights (PUR) document, and Microsoft Volume Licensing price lists as additive licenses through the Microsoft Open License, Microsoft Select License, and Microsoft Select Plus agreements for the following products,” a posting on Microsoft’s partner licensing site said.

Translation: Microsoft partners can now acquire legal licenses that let them rent Microsoft software to their customers.

The post also notes, however, that many third-party rental schemes in place currently around the world, which claim to permit rental of Microsoft software, are not legit.

“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,” the post said.

So the solution is for Microsoft partners to provide customers with valid rental licenses from Microsoft.

Still, there’s a catch or two. For one thing, the partner must purchase a full copy of the software to be rented out, and the rental software license only applies to the PC that has the full licensed copy installed. It cannot be transferred.

“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,” the post said. “Your customers can rent, lease, or outsource desktop PCs running genuine Microsoft software with no ongoing payments or reporting for the term of the underlying software license or the life of the desktop PCs.”

Among additional limitations on rental software, however, is it can’t be run remotely or in a virtual machine.

Also, Rental Rights licenses do not remove the requirement for full, valid licenses for Windows and Office. The Rental Rights licenses are “add-on” licenses that allow rental, leasing, and outsourcing in addition to the original licenses.

Renting Microsoft software is not a new idea. For example, Microsoft filed for a patent more than a year ago that would enable a “pay-per-use” licensing model.

Now, Microsoft is pitching the Rental Rights licenses as a way for partners to bring in extra revenue, as well as a way to ensure that all of a third-party customer’s systems are properly licensed.

To inaugurate the offering, the company is running a promotion through Jan. 30 that lets partners save up to 30 percent on Rental Rights licenses for Office Professional Plus 2007, Office Standard 2007, and Windows. Partners have the choice of whether or not to pass those savings on to their customers.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of the internet.com network.