Microsoft Postpones Controversial Licensing

Microsoft has postponed its controversial new Licensing 6.0 volume-licensing and Software Assurance programs for a second time, pushing back the launch period to July 31, 2002. "Customers have told us that ... our original 5-month transition period was just not long enough," said Bill Landefeld, vice president for Microsoft's worldwide licensing and pricing. "After listening to customers, Microsoft is extending the launch transition period to allow customers sufficient time to review existing licenses, evaluate new options, and decide how to take advantage of Software Assurance." Microsoft claims that, given a little more time, customers will come around to the company's new licensing policies. But a groundswell of opposition to the plans has erupted, and many corporations are looking at alternative products.

One problem with the new enterprise licensing policies is that Software Assurance essentially requires corporations to purchase maintenance contracts that automatically upgrade corporations to new Windows and Microsoft Office versions as those versions become available. This requirement is at odds with proven customer behavior: Most corporations upgrade every 3 to 5 years, not every 2 years as the new licensing policy requires. Furthermore, Microsoft axed its previous policy of providing better deals to companies that purchased licenses in bulk—a change that could lead to higher costs for many corporations.

A recent Giga Information Group and Sunbelt Software survey found that more than 80 percent of technology professionals have negative feelings about the new licensing programs, which they believe will increase costs. (Microsoft claims that only 20 percent of its customers will experience higher costs.) More than 35 percent of the respondents said they were considering Microsoft alternatives.

Microsoft competitors, especially Sun Microsystems, will welcome any unhappy Microsoft customers. Sun recently previewed its upcoming Office XP—compatible application suite, StarOffice 6.0, which offers a compelling level of functionality and interoperability with Office file formats. Sun also announced that it's lowering the cost of its iPlanet Web server solution, an alternative to Microsoft IIS. And, of course, the open-source Linux platform offers low initial costs and at least the perception of security and stability.

TAGS: Windows 8
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