Microsoft's price hike could hardly be worse timing

Timing, they say, is everything. Microsoft’s could not be worse.

There is huge scrutiny and discussion going on about the effects of supplier lock-in and the relative merits of proprietary and open software standards – a debate prompted by the government’s increasingly heated open standards consultation.

Microsoft, in particular, is often quoted as an example of the perils of lock-in. Look, for example, at the European Commission, an organisation that has purchased Microsoft software for 20 years without an open competition because of its reliance on the firm’s products.

Look also at the experiences of Bristol City Council, which found that it had little choice but to stick with Windows and Office instead of its preferred open source strategy.

Microsoft’s aggressive lobbying of the Cabinet Office over its plan for open standards is taken by critics as an example of trying to maintain a monopolistic grip established by proprietary products at its largest UK customer.

So what does the supplier go and do? Raise its volume licensing fees by up to 33%.

That’s right – a unilateral corporate decision that will mean well above inflation increases in the price of the most popular forms of licensing agreement for organisations buying Microsoft software. It’s happening under the auspices of introducing a harmonised pricing structure across Europe, and because of the weakness of the euro relative to the pound, UK customers are taking the biggest hit.

But it’s OK, because if you don’t like it, you can easily swap out your Microsoft products for something else, can’t you?

Can’t you? Oh…

The days of technical lock-in to suppliers and their products are surely nearing an end. “Ah, but there will always be some form of lock-in, even in the cloud,” say big suppliers. If so, it’s interesting to listen to CIOs, who advise each other that the first question to ask of a potential cloud provider is, what is the exit clause?

If Microsoft wants to convince IT leaders it is no longer a company stuck in the past and hanging on to old business models, huge price rises are neither the way, nor is now the time, to go about it.

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This is an extraordinary decision, and clearly underlines why the IT managers at so many SMEs are avoiding the volume thing altogether in favour of individual licences. The MS licensing framework has always lacked transparency, and this blatant attempt to make the most of their dominant market share while they still have it will only bring about its erosion even sooner than they expected. There are some very good alternatives available (take LibreOffice or SoftMaker Office, for example), and many web-based CMS/extranet systems are making use of OpenOffice or LibreOffice rendering engines to generate MS Office-compatible documents (e.g. Kerio Workspace, Alfresco, Confluence - all more than capable of holding their own with SharePoint). For general use, there really isn't much to choose between them any more (with the possible exception of the remarkable OneNote).

This is a very odd decision. I look forward to watching the fallout!