Microsoft yesterday announced that it has revised its volume licensing agreements – effectively shackling its mid-size and large business customers to lengthy new contracts.

Under the new program, dubbed “Select Plus Volume Licensing”, customers will be able to buy multiple volume packages of products using a solo ID across an entire company.

Microsoft has worked a point system into the program, which kicks off 1 October. It said that the more applications, systems and servers customers buy on a pay-as-you-go basis, the lower the price.

The software giant reckoned that offering a single contract to its customers will “simplify purchasing” for corporate firms. The reality of course, is that Microsoft wants to sell more software in a market that is increasingly exposing itself to the concept of free and/or open source alternatives.

Customers will also find themselves grappling with new pricing structures for Microsoft’s Software Assurance (SA) option, which gives firms added support, free upgrades and software extras not included under separate agreements.

Under Select Plus, customers have to buy a full three years of SA, and there’s an added caveat: Future pricing will be based on an individual company’s buying patterns and upgrade cycle after the initial three year contract has expired.

Microsoft has cut its total number of licensing programs from over a hundred last year to a more palatable 26. That’s a move that could cheer some customers who have struggled to negotiate their way through Redmond’s complex volume licensing jungle terms.

However, IT departments take note: read the small print, because these agreements are never as simple as Microsoft would have you believe. ®