Apple Offers Three Years Of Mac OS X Server For The Price Of One Upgrade

C|Net is reporting that Apple is offering a new deal for Mac OS X Server. The company is offering a three year subscription to Mac OS X that includes all updates during the period. The company is pricing the subscription at the same price of a single upgrade/license. The deal means that for the same price as buying a copy of Mac OS X Server, US$499 for a single-user license and US$999 for an unlimited-user license, server customers can get three years worth of updates. Apple already offers the unlimited-user license with all Xserve models sold. The C|Net article points out that the deal is negated if Apple releases only one paid-upgrade during the three year period.

This contrasts with Microsoftis corporate licensing strategy of making its server software available in two-year subscriptions. The license would expire after the two year period, requiring corporations to perpetually pay what many have described as the Microsoft tax. Appleis licensing offer includes updates for three years, but the license would not expire. From the C|Net article:

Appleis position in the server market is minor, but the pricing plan could find some favor. Thatis because Microsoft charges more. A 10-user license of Windows 2000 Server costs $1,199, and to get an upgrade, customers have to enter into a license arrangement. Under many of these agreements, the cost of upgrades after three years comes to around the same as the price of the original software license.

In one sense, though, the new programis major beneficiary could be Apple.

"From Appleis point of view, they get the money up front and decide later whether to offer the upgrade," said Forrester Research analyst Frank Gillett.

Collecting the money up front is increasingly important to companies, not so much from a revenue perspective but because it discourages customers from later abandoning a companyis product for an alternative. This could be beneficial to Apple as it tries to win customers considering a move to Linux. Apple also hopes to woo Microsoft customers that refused to pay recent licensing-fee hikes. Not coincidentally, Microsoftis program also locks in customers for a set time period.

Under Microsoftis Licensing 6 plan, users pay a "Software Assurance" fee--29 percent of the full purchase price annually--for two- or three-year contracts. Microsoft angered customers in switching over to the plan, which for many worked out to a 33 percent to 107 percent cost increase, according to market researcher Gartner.

There is additional information in the C|Net article, including negative comment concerning Appleis chances in the server market.