Protests continue over Microsoft licensing

As Microsoft gears up to the launch of its controversial new corporate licensing plan on 1 October, US users continue to register...

As Microsoft gears up to the launch of its controversial new corporate licensing plan on 1 October, US users continue to register their objections.

Under the revamped software licence plan, which Microsoft says will simplify volume buying, many users continue to feel pressured into committing to upgrading before they want or need to.

"The alternative to this is to do nothing and live with what you have got now for a long time. But many IT executives look at this as a ransom demand," said Alex McWethy, IT executive with a large food distributor.

If businesses delay the decision to sign on, they may end up paying inordinately high upgrade fees for new versions of Microsoft products, according to analysts.

"I haven't noticed much softening in the attitude of many users toward this. I think a lot of customers have resigned themselves to the fact there isn't a whole lot they can do about it. But I also haven't had clients calling me up to say what a wonderful thing this is either," said Alvin Park, a senior research analyst at Gartner.

One aspect of the plan that still irks users is the requirement to hold current versions of Microsoft products in order to qualify for upgrades or discounts for the next version of a product.

Some observers believe Microsoft's desktop operating systems and application suites have reached their highest market saturation point, and that the only way Microsoft can continue generating more revenue is through the new licensing plan.

"I think it is a way for them to continue generating more revenue while also cutting down the cost of supporting older products. If someone insists these older products be supported, they will be paying through the nose for it," said one high-ranking IT executive. "I don't feel their lack of revenues is my problem," he added.

Some home-based businesses complain that Microsoft officials are pushing them toward purchasing the minimum five-user licence for products such as Office XP, telling them they can save money over the long term. Small businesses worry however, that even with the purchases, they will not be eligible for upgrade discounts on products because they are not volume purchasers.

However, Microsoft officials say that users running a small business, or a corporate customer that wants to buy a single licence for a server-based application such as SQL Server can do so and still receive discounts.

"The Open licence starts at five, but if you want to purchase 10 or 15 licenses for instance, you can also purchase them through retail. However, those upgrades are not eligible for the Software Assurance support programme," said Rebecca LaBrunerie, Microsoft's programme manager for worldwide licensing and pricing.

The change is also causing confusion. Last week, Gartner reminded its clients that, in order to take advantage of Microsoft's advantage upgrade programme offer, they need to submit the signed Select Version 5 agreement by the end of September 2001.

"When Microsoft pushed back [the deadline] from 20 September 2001 to 28 February 2002 for users to decide on buying into Upgrade Advantage, they gave people another five months. But the company did not give them an extra five months to decide on version upgrades," Park said.

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