Microsoft licensing shift creates uncertainty for users

Microsoft's announcement last week that it has restructured its volume software licensing and upgrade policies has sent IT managers scrambling to their file cabinets to review the contracts they have in place now.

While the changes are expected to be good news for some users who could see reduced prices on Microsoft's products, many companies said they're still unclear what the new approach will mean to their budgets and operations. And some IT shops will be forced into expensive, time-consuming audits of their systems just to see where they currently stand.

Come this fall, Microsoft plans to extend its Select licensing agreement from two years to three, lower the number of PCs needed to qualify for an enterprise license from 500 to 250 and add a subscription licensing option. The company also will replace a handful of upgrade programs with a new Software Assurance upgrade policy.

At Delta Technology, the Atlanta-based IT subsidiary of Delta Air Lines Inc., general manager Kurt Ebenhoch said he's not sure yet what the new licensing provisions will mean for the 45,000 Windows-based desktop PCs that he oversees. "We're still in the process of reviewing the changes and analyzing what impacts they will have," Ebenhoch said.

But because Delta Technology is still in the midst of an upgrade cycle to Windows 2000, Ebenhoch added, his initial feeling is that the company won't be immediately affected by the pending changes, which are due to take effect Oct. 1. Existing contracts Delta Technology has with Microsoft for supporting Windows 2000 will continue to remain in force, he said.

IT shops not currently working on upgrades may not be so lucky, though. "A lot of companies are going to spend a lot of time and money just trying to figure out the implications," said Don Bussell, president of Omicron-Chicago, a Glen Ellyn, Ill.-based independent user organization for large IT sites.

Bussell said many IT managers will have to run unplanned audits of every PC in their companies to determine what Microsoft products are on each system, what the specific software releases are and whether anything needs to be upgraded. "If you don't have a great asset-management system, it's going to be an expensive pain right now," he said.

Joe Rowell, technology manager at Seattle-based Inchcape Shipping Services Ltd.'s facilities in Mobile, Ala., said his company hasn't concluded what the cost implications of Microsoft's policy shift will be. But he isn't concerned about overseeing a time-consuming audit.

Rowell said his company is part of the Microsoft Select program, which means Microsoft keeps a list of all of the software his company uses. He said he compares that with his own asset-management software from Remedy Corp. in Mountain View, Calif., to get a complete view of his licensed software.

While some users complained privately that the upcoming changes appear to be just another way for Microsoft to make more money, others were upbeat about the new licensing and upgrade program.

"This is a good thing," said Tom Nolan, director of IT at the American Institute of Certified Public Accountants in New York. "It guarantees stable prices over the life of the agreement."

Nolan added that his organization will save money under the new terms because it upgrades products every three years in order to stay current with Microsoft's new releases. Under the new approach, he said, he no longer will need to conduct audits "as long as our workstation count is less than the number in our Enterprise agreement."

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