House of Fraser has dropped Microsoft's Software Assurance programme, which offers software upgrades and discounts on training in return for an annual fee, claiming it is poor value for money.
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The retailer has decided it makes better business sense to pay Microsoft for new licences whenever it upgrades its systems, rather than pay an annual fee for upgrades that may not reflect its business priorities.
"We have just decided there is no point in having Software Assurance, and therefore we have not renewed it. We have decided it is more cost effective to pay the full licence fee and upgrade when you want to do so," said House of Fraser IT director Frank Berridge.
Microsoft is due to announce changes to its Software Assurance licensing model next week. Microsoft licensing manager Mark Buckley said, "Microsoft is committed to simplifying licensing to make it easier for customers and partners to do business with us."
House of Fraser took the decision to abandon Software Assurance in May, after concluding that delays in its own upgrade programme coupled with delays from Microsoft in releasing promised product upgrades, meant the programme offered few advantages.
"It has taken us a lot longer to move forward with implementing things than we previously anticipated. Moving fully to Active Directory and being in a position to do the Windows 2000 Professional to XP upgrades - with other priorities these have just gone out the window," he said.
House of Fraser plans to make this upgrade to its desktops over the next 12 months. The cost will be covered by its previous Software Assurance agreement, but future upgrades will not be.
"Microsoft keeps extending the timeframe between when things are promised and when things turn up. And what you actually get in the two- or three-year window is significantly less than you expect," said Berridge.
Many software upgrades do not make sense from a business point of view, Berridge said. There is little advantage in upgrading to the latest version of Office, he said, when staff only use a fraction of the functionality of the current version.
Paying Microsoft for operating system upgrades only when needed makes better financial sense, said Berridge.
"If you actually have to fork out a large amount of money to do it, you think very carefully whether it is the right thing to do. And you will only do it if the case stacks up very strongly."
He called on Microsoft to simplify its licensing regime. "It is so complicated you need a degree course to understand it," he said.
Microsoft said, "All customers have individual needs and business requirements and our programmes are designed to offer choice and flexibility. In this case, the customer has clearly decided on a purchasing strategy based on their unique deployment and lifecycle needs and we completely support this."