A growing number of Microsoft customers are considering moving from Windows to open source software, such as Linux with Sun Microsystems' Star Office, as a way of avoiding the software giant's licensing changes.
Microsoft's new licensing agreements, announced in May, end the trade in Upgrade Advantage terms and introduce a Software Assurance programme that users and analysts believe could double costs through shorter upgrade cycles. Microsoft has argued that 80% of users will see licences fall or remain unchanged.
The company also introduced subscription licensing, which gives users access to the latest versions of its software for a continuing annual charge. The new terms will come into effect in February next year.
A confidential survey of the 500 Club, an invitation- only club of senior IT directors from the UK's leading companies, revealed that 93% of respondents believed Microsoft licences would cost more as a result of the changes. Consequently, 38% of respondents said they were "actively making contingency plans".
Many of these IT directors said they were looking at moving to an open source desktop, using the Linux operating system and Star Office, Sun's office productivity suite - both of which are free - as an alternative to Microsoft software.
"We are considering alternative software such as Sun's Star Office, and are also planning to defer acquisition of later Microsoft products for as long as possible," said a respondent, one of many who said this.
Simon Moores, chairman of The Research Group, a body representing software users, predicted that the Linux market will boom as a result of Microsoft's actions. "I think Linux may well find itself there as a protest vote," he said. "In the long term this could be a real threat to Microsoft."
Companies often feel trapped with Microsoft software - caught between the rock of Microsoft's challenging upgrade cycles and the hard place of moving to an entirely new operating environment.
However, some service companies see this dilemma as an opportunity.
Business and technology consultancy SMG Consulting has announced a migration package designed to help companies move to open source desktops.
The company said that by moving to open source with its migration package, companies can cut overall desktop costs by half.
These savings would be achieved through lower hardware costs - Linux with Star Office needs much less disc space, Ram and lower specification processors - and lower support costs, SMG said.
Alex MacCaskill, account manager at SMG, said many companies have registered an interest in migrating to open source with the company. "We have spoken to a major global bank that is saying it wants Microsoft out across the board," he said.
MacCaskill also said SMG has been in touch with the Cabinet Office, regarding changing software across government. "It thinks open source is a good idea," he said.
This could prove to be particularly relevant given the UK Government's close relationship with Microsoft. The Government Gateway - the middleware designed to allow different departments to talk to each other - is based on Microsoft software.
Case Study: Linux in a small business
Abrantes, a Web development and training company, has moved to Linux for most of its IT functions.
The company said it has to work with Linux when creating e-commerce Web sites, but "quickly realised that it could offer other benefits beyond being a simple Web development platform".
It now uses Linux for file and print servers, development database and Web server. It also uses the open source operating system across its desktop environment and as a testing platform for Web sites.
One of the biggest deciding factors was cost, the company said. Since Linux is free, it eliminates the software licensing costs associated with a Microsoft Windows 2000 or NT server.
Reliability was also a factor. "Our experiences with Linux have shown it to be virtually indestructible. It never crashes, it just works," the company said.
The company uses Linux on a single PC as both a server and a desktop operating system. This would not be advisable using Windows, but the company said it has no problems under Linux.
The company said Linux appears in the Network Neighbourhood just the same as any other machine on the network. It uses it as a file and print server in this respect. The Web server allows creation of new Web sites "quite easily" and the database server can be operated using Microsoft Access as a front- end, the company said.
The company did say that using Linux as a desktop operating system was "problematic". The main problem was the lack of compatibility with Word and Excel files. However, for internal documents this was not an issue because Star Office for Windows is similar enough to Word and Excel to allow users to adjust to it for simple tasks.
Telling it like it is: our readers speak
The Computer Weekly 500 Club survey reveals considerable confusion about the new arrangements, and a substantial proportion of IT directors actively engaged in contingency planning. These statements give a flavour of the responses.
Respondents wanted clarification on:
"The legal position as to whether Microsoft has the right to unilaterally alter licence agreements with companies"
"The many 'gotchas' in the small print, particularly with the SQL server options, which still have a deadline of 1 October 2001"
"Is all Microsoft software implicated?"
What will happen to existing Select and Enterprise subscriptions?
"Reasons; commercial policy; enhancements as a direct result of uplift"
"Microsoft claims that there will be no or limited increases in charges." "It should provide transparent examples"
What Contingency Plans are you making?
"Stay with NT4/Office 97 longer." "Stay with Office 2000 and migrate if Microsoft does not make a U-turn"
"Considering alternative software such as Sun's Star Office, and planning to defer acquisition of later Microsoft products for as long as possible." "Reviewing Sun's Star Office for non-essential users." "Investigating Star Office and Linux on the desktop"
"Re-evaluating Office product use"
"Looking at the alternatives - yet more cost and effort required"
"Evaluating alternatives and/or staying in current Office 97/2000 installation"
"Evaluating migration to Linux." "Further exploration of the Linux alternatives." "Considering a greater use of Linux"
"Having to re-think IT purchasing strategy to minimise impact"
"A more irritating problem was a recent situation surrounding a PC replacement project. We took delivery of 200 PCs with W2000 Pro pre-installed. We would have preferred to overwrite this installation with W95 for a short period of about four months and then re-apply 2000. Microsoft would require approximately £100 per PC for the re-application of W2000 over W95 in this situation. This added £20,000 to the project. We took the risk and stayed with W2000. Very irritating and somewhat exploitative."
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This was first published in August 2001