Users question value of licences after Vista delay

Windows upgrade could fall outside some Software Assurance contracts

Microsoft's decision to delay the release of Vista, the next version of its Windows operating system, has reignited the controversy over the value of the company's enterprise licensing terms.

Last week, Microsoft said it would put back the release of some versions of Windows Vista and Office 2007. Among the reasons cited was the need to "crank up" security levels on Vista.

Microsoft said the release date for the business versions of Vista, previously code-named Longhorn, and Office 2007 would remain November 2006, but consumer versions of the product would not be available until 2007. Security on the business version of the operating system would not be inferior to that of the consumer version, the company said.

David Roberts, chief executive of the Corporate IT Forum, whose members include IT leaders from FTSE 100 firms, said delays to product releases were damaging the credibility of Microsoft's Software Assurance licensing programme.

"Every time there is a delay there are a number of organisations that find the release is outside the renewal timeframe. That has been a problem for Software Assurance for several years."

Ben Booth, chairman of the BCS Elite IT directors group, said Software Assurance represented value for some users but product delays had tarnished its image. "Microsoft has started listening to clients more than in the past, and that is a positive thing, but if the gap between releases is too long, people will question whether Software Assurance is value for money."

Analyst group Gartner said businesses with licensing agreements that expire in September 2006 should pressure Microsoft to extend new version rights to Windows Vista, no matter when it ships.

Microsoft told Computer Weekly it would not extend these rights or pay compensation because of delays to the operating system that was originally scheduled to ship in 2004. It insisted businesses had received strong return on investment from Software Assurance regardless of whether they had received new versions of products.

Brian Gammage, research vice-president at Gartner, said businesses would increasingly ask, "Will you receive value?" when taking out subscription licensing agreements.

"Microsoft wants to move as many of its business customers as possible towards subscription annuity revenue. The value of these depends on Microsoft in respect of delivery. This [delay to Vista] can only be a step backwards."

He added that Microsoft's efforts on security should be commended. "Microsoft takes the blame and tries to set a good example; it has got to get some points for that."

Microsoft said that Software Assurance does not guarantee rights to upgrades. David Weeks, Microsoft Windows Vista product marketing manager, said, "Nobody offers a technology upgrade guarantee in a maintenance programme."

He also said Microsoft had never committed to release Vista before the end of this year.


What IT directors say about Software Assurance

"Most previous OS releases from Microsoft have slipped, and increasingly I think users are happy to accept this in preference to an unreliable or insecure product.

"We chose to avoid Software Assurance some years ago, seeing little value in it, and that still seems to be the case. The longer organisations leave [before an upgrade] the more choice they will have in terms of alternatives. I am sure some organisations will want to leave Vista out and skip to its successor to at least gain a greater step change of benefit."

Nick Leake, director of operations and infrastructure, ITV


"Software Assurance has allowed us to offer our users increased functionality year on year from Microsoft without me having to cost justify, delay or cancel upgrades because of cost. My belief is that Microsoft has taken the right decision."

Simon Merry, head of IT, Chemring


"It is hard to see the real reason for the delay - they have apparently dropped a lot of features from Vista in order to not let the release date slip further. I am also concerned that Microsoft appears to be forcing people to take out Software Assurance if they want some of the more heavyweight business versions, as a desktop is now seen as a commodity that you source as cheaply as possible. We are going to wait for Vista Service Pack 1 before making any decisions to deploy."

Peter Bramhill, IT director, Groupama Insurances


"I feel Microsoft will need to lengthen the timescale [of Software Assurance] to more than three years as their recent history is more like a five-year upgrade cycle. Has it ever released a product on the original timetable? I would rather the product was reliable and secure than was rushed."

David Tidey, head of IS, Royal Borough of Kensington and Chelsea

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