Microsoft licensing driving users away

In a recent informal poll conducted by InfoWorld U.S., 42 per cent of respondents said that even though they currently use Microsoft Corp. servers they are planning to switch to non-Windows software on the server side because of discontent with the company’s controversial licensing plan for desktop products.

The prospect of IT shops gravitating away from Microsoft’s servers, at a time when the company is expected to deliver its critical next generation of Windows .NET servers early next year, could open up opportunities for competitors such as IBM Corp., Sun Microsystems Inc., BEA Systems Inc., and the ever-changing collection of Linux vendors.

The Redmond, Wash.-based software behemoth’s Licensing 6.0 plan is scheduled to take effect July 31.

It has been almost a year since Microsoft first introduced its Licensing 6.0 plan, which includes the controversial program called Software Assurance. That option would require users to make a contractual commitment to buying volume upgrades for its best-selling operating systems and desktop application suites ahead of time and paying an annual fee, instead of upgrading when they wanted or needed to.

“I don’t like the restrictive nature of the [Software Assurance] plan, but it wouldn’t make me throw out some huge investments I have in their servers either. However, let’s just say I might be more open to considering some other [server] alternatives if they came along. The plan is just one more thing in the negative column on that decision,” said Barry Hewitt, a LAN administrator with a large regional medical equipment distributor in Chicago.

Users who do not sign up for Software Assurance could see their upgrade costs rise anywhere from 30 to slightly more than 100 per cent, according to research conducted last year by Gartner, a consultancy based in Stamford, Conn.

Last fall market research firm IDC conducted a poll among IT decision makers asking them if the terms and conditions of Licensing 6.0 would make them consider moving from either their desktop or server platforms, and 14 per cent said they would. When the other “still evaluating” or “don’t know yet” categories were added in, however, the number rose to a little more than 60 per cent.

“This plan has not generally been accepted yet, although Microsoft presents it as a better deal for most people. But when you ask Microsoft to define ‘most people’ it translates to their largest customers,” said Dan Kuznetzky, vice-president of IDC’s systems software research group, in Framingham, Mass.

Microsoft officials recently admitted they had not given customers enough time to make decisions about signing up for the licensing program and have done a “lousy” job of clearly explaining all the ins and outs of the new programs. They said they would step up their efforts over the next month or so to clear up any confusion. Microsoft also made it clear, however, that they do not intend to significantly revamp any of the program’s terms.

Microsoft is in the midst of a US$10 million education program intended to help customers make the right licensing decisions that best fit their needs, a company spokesman said.

Kusnetzky countered by saying that although it is important for Microsoft to better explain the program to customers, it is even more important that they listen to their major issues and not simply tell them more about how the plan works.