Saturday, August 03, 2002

Customers to Microsoft Licensing 6: thanks, but no thanks

According to CNET, it appears that most customers have let pass the July 31 deadline for signing up for Microsoft’s new licensing plan for business customers. The new plan, called Licensing 6, requires customers to commit to two or three year maintenance contracts that guarantee them the right to upgrade to new versions at no additional charge.

Without the maintenance contract, the next time you upgrade you pay full price. However, customers seem to be saying that they would rather pay full price later--if and when they decide to upgrade--rather than pay Microsoft now for upgrades they may want to defer.

Further stacking the deck toward Microsoft is the fact that Microsoft makes no commitment on when it will release new versions, and it does not have a good track record on delivery commitments when it does make them. It is even possible that Microsoft may not release any new versions during the contract period, meaning that the customer would pay for Licensing 6 and get absolutely nothing in return.

As noted previously, Microsoft’s latest money grab has the unintended consequence of making the business case for Linux that more compelling. In fact, a March survey by Sunbelt Software, a Wisconsin consulting firm, showed 38% of Microsoft customers are considering switching to other products.