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by Bryan Chaffin

Microsoft Facing Mounting Customer Dissatisfaction Of XP Licensing Scheme
October 5th, 2001

Microsoft's licensing schemes are finally getting noticed by some of its customers as reports spread that they will face significantly higher software costs because of those changes. Microsoft has eliminated existing licensing programs that allowed corporate clients to upgrade on their own schedule and is instead imposing a new corporate licensing program that locks customers into a two year upgrade cycle for which they pay by the year, in perpetuity, whether or not they wish to upgrade every two years. I've ranted on this subject before, but today we get a bit of new information: C|Net has published an article about a new study that shows a lot of Microsoft customers aren't happy about it. From that article:

Most corporate customers are unhappy with looming changes in Microsoft software-licensing programs, and many would consider switching to competitors' products, according to a survey released Thursday.

Conducted by market researcher Giga and Windows NT/2000 integrator Sunbelt Software, the survey of 4,550 technology professionals found that 80 percent of those polled expected to pay more for Microsoft software under the controversial new programs. About 42 percent said their Microsoft software costs would increase anywhere from 20 percent to 50 percent. Of the remainder, 19 percent said their costs would double or triple, while 7 percent saw no change and another 2.6 percent expected a decrease.

The survey also found that 36 percent said they would consider alternative products in light of the changes.

Whoa, what was that? 36% would consider alternative solutions? Wowza! First of all, I don't believe that 36% would switch to Linux/Novell/Mac for a second. The Lemming instinct is a strong one, and it takes more than the reality that they are getting worked over, but good, to make them switch. If 10% of Microsoft's corporate customers, however, rebelled and switched platforms or even just switched to a different productivity suite, a big chunk of the company's Monopoly Armor would be removed. Not only would Microsoft have less of the market, other competitors (such as Apple, hopefully), would have more, and that includes its own snoball effect.

The article then quotes a Microsoft spokesperson as saying that customers simply don't understand that upgrading every two years instead of four is better for them, despite the additional costs:

Microsoft spokesman Dan Leach dismissed respondents' dissatisfaction with the licensing program as a misunderstanding. "It confirms what we know, that we need to do a better job communicating the improvements...of making software easier to buy in bulk and administer," he said. "We need to do much more to help customers understand our program."

Hmmm... I understand it, and I say that with the exception of those companies that upgrade every two years, NO ONE ELSE will benefit from MS's new plans except MS. After all, if Microsoft's customers were already upgrading every two years, the company wouldn't need to try and pull this kind of shenanigan in the first place. The best thing is that the Windows lemmings can kiss major upgrades goodbye if Microsoft is successful at moving to this new business model, and "steady improvement" replaces "major upgrade" as the Holy Grail of development. Watch all those temporary employees get canned, because there will be a LOT less coding going on in Redmond.

This article also included a paragraph that really gets down to the heart of the situation:

But in recent years, companies have been upgrading less frequently, compelling Microsoft to adjust its licensing program accordingly. Rather than let companies choose to upgrade when they want, Microsoft wants to lock licenses into two-year maintenance contracts--a precursor to the company's forthcoming .Net software-as-a-service strategy for selling software on a subscription basis.

Microsoft has lost sight of the fact that its job is to make compelling products that customers are enticed into buying. Instead, the company has come to see customer buying habits as an inconvenience that need to be forcibly changed into something more convenient. In a market with a competitive playing field, any company that had the audacity to pull that kind of nonsense would get trounced by competitors able to capitalize on this by offering better service, a better product, better pricing, or in this case, better licensing. Microsoft's monopoly power grants the company a fair amount of immunity from those forces. That said, this study offers a glimmer of hope that at least some of the Lemmings are going to at least pause at the cliff before plunging into the cold waters of XP licensing, and some might even turn around and look at the wide world of options that are available to them. Should that happen, Linux vendors, Novell, and Apple will likely be the biggest winners. Remember, the best version of Office runs on the Mac, with the exception of Access ::cough choose FileMaker Pro cough::, a Windows-only product.

With the DoJ having sacrificed the concept of right & wrong on the altar of expediency in the wake of the September 11th terrorist attacks, let's hope those Lemmings have the backbone to follow through with their disgruntledness.

began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).

You can send your comments directly to him, or you can also post your comments below.

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