Users brand licensing change an 'upgrade tactic'

Microsoft is attempting to boost enterprise upgrade sales to Windows 2000 with its decision to drop its volume licensing program for the Windows NT Server 4.0 operating system, according to industry watchers.

Analysts predict the decision will meet resistance and the Sydney-based Microsoft User Group said it will certainly have an impact on Australian companies.

Citing decreased demand for NT 4.0 as its reason for stopping the volume-licensing program, Microsoft is expected to announce an end to software support by December.

Senior Gartner analyst Matthew Boon said there will definitely be resentment from users with a large NT server base.

"Clearly the decision by Microsoft to remove volume licensing as an option for NT Server is designed to speed up the transition of its customer base to Windows 2000 Server," he said.

"Microsoft will have to be very careful in how it presents this to users, a simple take-it- or leave-it-attitude will not do much for its image.

"At the end of the day if a large NT account demands that it be allowed to add volume seats to its installation, it won't take too kindly to these kind of upgrade tactics by Microsoft."

President of Sydney-based Microsoft Access/SQL Server, ASP .Net user group, Adam Cogan, said: "It will be difficult for some people. Some companies don't want to go to 2000. Obviously it will affect a few companies."

Gartner research director Greta James said if users had a choice they would want NT support forever, but said commercial considerations have to be taken into account.

"Enterprises buying an original equipment maker's copy of Windows XP Professional through their hardware suppliers now have downgrade rights. These rights, however, apply only to the Windows XP Professional operating system and not to prior versions such as Windows 2000 or Windows NT Server 4.0. Enterprises wanting to downgrade previous versions must pay extra for the rights," James said.

October 1 was the cut-off date from which Windows NT Server 4.0 will no longer be available through volume licensing programs. The server will continue to be sold on an individual basis through retail channels, but licences can no longer be bought through the version, competitive or product upgrade programs.

Volume-licensing customers who need licences for new installations of Windows NT Server 4.0 can buy them for the Windows 2000 server operating system through a 'downgrade' option, which is more expensive than the original volume price for Windows NT Server 4.0.

Microsoft said these "downgrade" installations can then be upgraded to Windows 2000 later at no additional cost.

Microsoft extends licensing transition until July 2002In the face of customer concerns, Microsoft will extend the transition period for its new software licensing programs by four months to July 31, 2002.

The extension will apply to end users considering their volume licensing options under the Open, Select and Enterprise licensing schemes and the Software Assurance upgrade plan, Microsoft said.

Customers had said that the original five-month transition period was not long enough to plan appropriate software strategies and, given the difficult economic climate, Microsoft has accepted those concerns, the company said in its statement.

The changes include:

- Microsoft is extending the Licensing 6.0 launch transition period to July 31, 2002, including an extended transition for Software Assurance.

- Upgrade Advantage is available to customers under the Open and Select agreements during the full launch period.

- During the launch period, Office 2000 customers as well as Office XP customers can enrol directly in Software Assurance as these will both be considered as current versions -- customers who have already made licensing decisions will be able to benefit from the changes in the scheme.

In May, Microsoft announced a major overhaul to its licensing schemes to go into effect on October 1. Part of the scheme prevents customers from buying a single-version upgrade to Windows. Instead, they need to either buy full versions each time they want to upgrade, or sign on to the Software Assurance plan, which gives customers the right to run the most current versions of Windows for the length of a licence agreement, typically three years. - David Legard

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