After years of fanatical focus on large companies, Microsoft has rediscovered the midmarket and launched aggressive new strategies there. But CIOs remain smartly skeptical.

When John Lauer came back to Microsoft Corp. in 2004 after taking six years off, he discovered that the software giant's licensing process had not gotten any simpler during his absence. So the newly appointed vice president of midmarket strategy blocked off two hours on his calendar one day to try to get up to speed.

Microsoft, he discovered, offered some 40 ways to license software, and each came with 24 pages of paperwork. Two hours wasn't nearly enough time. "I couldn't figure it all out," Lauer admits, "and I knew our customers couldn't understand it either. You could get five different recommendations from five different resellers on how to buy our products." As David Burns, a partner at Universal Management Solutions, a Microsoft consulting partner, puts it, "You can get a Ph.D. in Microsoft licensing."

Last fall, Microsoft revamped its licensing structure, reducing the 40 models to nine and unveiling a program aimed at midmarket CIOs. The contract was slimmed down to five pages. "I've gotten beat up on licensing a lot," Lauer says. "We see it on our customer satisfaction surveys. I expect to see some real improvements in customer satisfaction."