Microsoft CEO admits licensing gaffe

Microsoft has finally admitted that it mishandled the introduction of controversial software licensing changes last year.

Microsoft has finally admitted that it mishandled the introduction of controversial software licensing changes last year.


The admission came from the software giant’s chief executive officer Steve Balmer in a now widely publicised staff memo earlier this week. In the memo, Balmer also urged staff that Microsoft needs to more customer focused and develop an alternative to desktop outsourcing.


Ballmer admitted the company made a mistake in the way it handled the introduction of its software assurance licensing programme last July, which introduced a subscription model. It caused outrage among users who claimed that they were being forced into an upgrade they had not asked for. 


"As we add new capabilities to our line-up, we must manage the release of these technologies with the goal of simplifying and enhancing the customer experience, rather than only maximising revenue growth," said Balmer.


He also emphasised the need for the software giant to give users enough time to make transition such as changes to licensing or ending product support. User demands forced Microsoft to extend support for NT 4.0 until the end of 2004. The company originally planned to end support on 31 December 2003.


"As we decrease support for some legacy technologies in favour of new approaches, we must provide appropriate notice, transition time and consistency for customers."


Ballmer was also concerned by the level of desktop outsourcing among enterprise users and said that Microsoft would be dedicating time and effort to develop an alternative model to outsourcing.


"We need an offer of managed desktop services that we can make to enterprises – with our partners – that is different from classic outsourcing. We will assign key talent to this challenge."


While the company has spent time talking directly to chief information officers and business leaders on the Microsoft strategy, Ballmer said, "We must also go back to our roots and reach out broadly – in person, online, wherever and whenever we can – to generate enthusiasm around the innovation we bring to market."


Ballmer wanted Microsoft to generate the sort of enthusiasm the company experienced in the early 1990s when Windows 3.x and the Visual Basic development were introduced.


"We need to stimulate communities that support what these innovations can do, and create an emotional attachment to our products."


Testimony to the success of its strategy in the early 1990s is the fact that there are more than six million Visual Basic developers worldwide, making it the most success developer tool.


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