Microsoft Gives In To Customer Pressure, Extends Deadline For Upgrading To XP

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ZDNet is reporting that Microsoft has extended its deadline for business customers to upgrade to Windows XP or lose volume discounting options. The company also recently backed off of its policy of forcing some businesses to pay twice (and somehow seemingly getting them to actually do so) for a Windows license if they erase a preinstalled copy that came with a new PC and replaced it with their own custom Windows image.

The deadline extension moves the upgrade cutoff to the Summer of 2002, and was done in response to much negative customer criticism as well as a poll that showed as many as 36% of IT people were considering not upgrading due to the added expenses that will entail. Some of those customers had complained that they needed more time before making the move to XP. That move will include the fact that those customers will be renting Windows from Microsoft, paying for it every year, instead of purchasing it. From the ZDNet article:

Bowing to customer pressure, Microsoft has extended the deadline for business customers to sign up for a licensing program, just days after backing off a controversial provision that forced some customers to pay twice for software they purchased.

The change pushes back to July 31, 2002, a deadline to switch to the new program. Microsoft recently had extended the deadline from October to next February.

"Customers helped us understand that we underestimated the amount of time needed to launch this new program, especially in light of current economic conditions," spokesman Dan Leach told Reuters.

"They needed time to review their existing licenses and decide how to best take advantage of the new program," Leach said.

As reported earlier, Microsoft quietly introduced the change on Oct. 1 in conjunction with another sweeping licensing revision that, according to research firm Gartner, raised software costs for many customers from 33 percent to 107 percent.

"The message here is customer pressure works, and the government scrutiny helped," said Gartner analyst Neil MacDonald.

But the change, while technically a victory for Microsoft customers, may not be logistically feasible for many of those affected. A provision affecting Windows XP could compel some companies to subscribe to a higher-level, volume-licensing program than the one used today.

A Microsoft representative confirmed that the company relaxed the restrictions on "reimaging" but could not immediately offer additional comment.

Under the old licensing provision, Microsoft could force customers buying PCs installed with Windows 98, NT or 2000 to pay for a second copy of the operating system.

To more efficiently manage their systems, many companies erase the copy of Windows installed on their PCs and replace the OS with an identical version that also includes the appropriate hardware drivers and software applications for their work environment and corporate network.

But the software giant started telling companies last year that the practice, known as reimaging, violated their licensing agreements. Microsoftis solution: Pay twice for Windows.

There is a lot of additional information in the full article, and it is a good read.

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