Users face Windows 2000 licence shock

Organisations currently migrating to Windows 2000 could face a nasty shock under Microsoft's new licensing regime.

Organisations currently migrating to Windows 2000 could face a nasty shock under Microsoft's new licensing regime.

Microsoft UK licensing manager, Duncan Reid told CW360 that the company will cut off cheap upgrade paths from the operating system next summer, even though Windows 2000 was launched 18 months ago. He said: "Windows 2000 will be considered a current product until July 2002."

After this time, Reid added, users will have to pay a full upgrade fee if they wish to migrate to the next Microsoft operating system, such as Windows XP.

Meanwhile anger continues to grow about Microsoft's controversial changes to its licensing regime and the new Software Assurance programme, despite last week's climbdown on the date of the deadline for discounted upgrades.

Some users, angry that they face a 25% a year price hike, told CW360 that they will start looking at alternatives to Microsoft products.

One user, the head of technology at a travel Web site said that his company bought Microsoft Small Business Server a year ago as a cheap way of getting NT Server and Exchange Server. Although limited to 50 users, he understood the package had an upgrade path to the full Back Office suite. "Now there is no upgrade path and Microsoft has discontinued the Back Office bundle," he told CW360.

The impact on his company, he said, was significant. When the organisation reaches 51 users or more on the system, it will have to purchase new copies of Windows 2000 Server and Exchange 2000, together with client access licences (CALS) for each user, at a total cost of £8,500. "This is double what it would have cost to upgrade to BackOffice 2000." Since the company has not grown to 51 users yet, he added: "We've got time to look at migrating to Linux and a cheaper groupware product."

Another complaint came from Sue Beesley, a commercial director at Network Defence, an IT security firm. She said her company quite frequently gets involved in selling and building Microsoft servers. This month she is looking to price a Windows 2000 licence for a customer site with over 500 users.

"We did not know about the licensing issue until very recently," Beesley told CW360. "When we correlated the cost of the licence between two distributors and checked with Microsoft we were quoted a 50% charge [for Microsoft's Software Assurance subscription]."

A standard Microsoft client access licence at her client's site for Exchange 2000 would cost just under £30,000, said Beesley. "To buy the software with the two year Software Assurance is almost £45,000," she added.

Microsoft's Reid acknowledged that users will have to pay between 25% and 29% per year for their Software Assurance subscription. He said the benefit of the programme is that users would be able to upgrade to new releases of Microsoft software for free.

But, Beesley pointed out, paying 50% more for a two-year subscription is simply not cost effective. "Most users don't upgrade their software over two years. We have clients running NT and a few who have just moved to Windows 2000."

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