Here's How Microsoft Could Sell Lots Of Windows Tablets To Big Companies

Enterprises might get a break on Windows 8 devices with Office 15 -- if they happened to have signed a new license deal after mid 2011.

That's one possibility raised by Cynthia Farren, principal of a software license consulting company.

While Microsoft has not yet said how it will charge enterprises for Windows ARM devices, it has offered clues.

Big companies often license Microsoft software with an Enterprise Agreement, or EA. It includes a lot of side benefits, including free upgrades to the latest versions of Microsoft software.

Earlier today, Microsoft said that Windows 8 ARM devices will "include" a special version of Office. It's not exactly clear what "include" means, but Farren has an idea.

In license agreements after mid-2011, Microsoft deliberately changed the definition of "qualified desktop" to "qualified device" when indicating what type of device is covered by the EA.

"If your EA includes Office and specifies 'device' then Microsoft will likely have to include Office 15 on ARM in your EA licensing agreement," says Farren.

But the trickier part is how Microsoft will charge for the Windows 8 operating system itself. To understand the potential gotcha, you've got to understand how Microsoft treats non-Windows devices in these agreements.

If a company yanks out its Windows desktops and replaces them with iPads that run Windows and Office, Microsoft charges a "Virtual Desktop Access" fee for each device. And it doesn't remove those devices from the cost of the EA agreement unless a company deliberately goes back and negotiates for that.

So Microsoft often double charges for those devices -- still charging for the Windows license no longer in use, and also charging a fee to access Windows in a virtual Web-based cloud way.

Microsoft is clearly trying to penalize non-Windows devices by making it super expensive to run Windows software on them.

But if Windows 8 on an ARM tablet is considered a "fully functional OS" and not an "embedded OS," then an upgrade to it would be covered by the EA license with SA. A company with a recent EA could swap out other Windows devices with the tablet and be squared away.

That means companies would get a price break on Windows tablets compared with iPads -- at least when it comes to Microsoft software.

It is unclear how Microsoft will treat customers with older EA agreements that still use the words "qualified desktop."

Farren doesn't expect Microsoft to be offering any great deals on EA licenses for Windows ARM tablets. While companies may not have to pay for Office 15 or the VDA fee, there are other gotchas. Because employees may actually need two devices -- their PC and their tablet -- enterprises could wind up spending more on Microsoft software overall.

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