Users shun MS licence charges

Two-thirds of Microsoft's customers are resisting its pleas to sign up for the new software licensing programme which comes into...

Two-thirds of Microsoft's customers are resisting its pleas to sign up for the new software licensing programme which comes into force worldwide on 31 July, according to market watchers at analyst firm Gartner.

Mike Silver, US research director at Gartner, said a third of Microsoft's customers are refusing to sign the new licensing agreement. Instead they are opting for the more expensive upgrade path or looking elsewhere.

Microsoft claims that its revenue has jumped by $1bn (£685m) since the plan was announced, but the arrival of a new version of Staroffice from Sun Microsystems later this quarter will offer an alternative productivity suite for "under $100 per user", according to Sun.

Last May Microsoft announced changes to its licensing of business software, introducing a three-year subscription-based license which includes upgrades to the latest products. However, it abandoned trade-in upgrade options for companies that continue to buy software. Industry experts believe this will increase licensing costs for companies with upgrade cycles longer than three years.

Jon Mein, Gartner's research director for software asset management EMEA, said, "65% have yet to make a purchasing decision: to do nothing or to sign the agreement and make a purchase. Of the other 35%, clients who have committed to the Enterprise agreement have had the greatest negotiating clout.

"It is the SMEs, organisations with between five and 249 licensees, who are going to struggle because of their lack of negotiation ability [through low-volume purchases]."

Microsoft is engaging in a series of roadshows to increase awareness of the approaching deadline.

Read more on IT for small and medium-sized enterprises (SME)

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