Gartner warns Microsoft customers: Plan now

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Gartner warns Microsoft customers: Plan now

Analysts' organisation Gartner Group has once again warned Microsoft enterprise customers to review their software licensing contracts or risk paying higher prices as the deadline approaches for the software maker's switch to a new licensing regime.

From 31 July, Microsoft will end a number of licensing plans that allowed bulk software customers to pay discounted prices when upgrading their desktop and server software.

The new Software Assurance licensing scheme, first unveiled almost 12 months ago, requires customers to pay an up-front price for software and an additional fee each year that entitles them to software upgrades for the life of a contract.

Many customers have balked at the changes, claiming they could be forced to upgrade before they were ready to install new software. Under the expiring program, bulk software customers were able to upgrade at their own pace and still enjoy upgrade discounts.

A number of research reports from Gartner, IDC and other analysts groups have highlighted customer dissatisfaction.

In one informal Gartner survey conducted in April, around one-third of Microsoft customers polled said they have renewed the terms of their Windows and Office licences under the new plan.

One reason is the long-term costs of the new licences. According to Gartner, customers could pay as much as 107% more for software during the next four years under the plan.

A study from research company Information Technology Intelligence Corporation, also conducted in April, noted that 41% of those polled said they cannot afford the cost of Microsoft's new scheme.

Gartner is again advising its clients to review their Microsoft software licensing agreements immediately and work out a game plan before the new policies go into effect.

If customers act before 31 July, they can enrol their existing software licensing plans in Software Assurance at a discounted rate. If they buy into that plan, they will get access to the most recent version of the products and pay an annual fee for the next three years to receive any upgrades released in that time.

Enterprise customers also have the option to sign on to the Upgrade Advantage, a licensing plan, if they are still running older versions of Microsoft software.

Under Upgrade Advantage, users pay to get to the most recent version of a product and pay an annual fee for up to two years that entitles them to upgrades. Microsoft is touting Upgrade Advantage as a transitional plan to ease customers into Software Assurance.

"Clients who miss the 31 July deadline could pay up to 45% more for their licences," if they were to buy a new version of their software within the next two years, Gartner analyst Alvin Park said.

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