Licensing deadline hits unprepared enterprises

Corporate IT should be prepared for Microsoft's changed licensing scheme by now or face a 45 per cent price hike next upgrade, according to Gartner.

While there are only days left for Australian enterprises to decide their future upgrade plans, many are not ready for the revised Licensing 6.0 plan, which becomes effective on August 1, according to a local Gartner analyst.

From this date Microsoft's enterprise customers can purchase new licences with or without Software Assurance, but they cannot upgrade the pre-existing licences, only replace them. Customers who have not switched to the new plan by that date will be unable to license Select version 5, Upgrade Advantage (UA) and Software Assurance (SA) on products they already have and will have to pay the full price of their next Windows and Office upgrades, rather than receiving discounted upgrade prices.

The new licence programs also require customers to pay a subscription fee for the life of a software contract, called an annuity licence.

While local enterprises over the past two months have had a look at licensing agreements and, if needed, put a business case forward, there are still a "significant number that haven't looked at it in detail", according to Greta James, research director at Gartner Australasia.

"[Microsoft customers] feel trapped. There is a lot of resentment. Enterprises are looking for alternatives although there are not a lot of options out there. [Alternatives] are still very new and untried," James said.

Gartner warns those that haven't taken appropriate action by now could end up paying a 107 per cent increase in a worst case scenario next time they upgrade.

James said her discussions with large enterprise customers revealed a high level of awareness of the problem.

"Large enterprises are feeling pressured to sign up for Software Assurance," James said. "It's more difficult for large enterprises to change and Microsoft is aware of that."

For companies who don't want to upgrade quite as fast as Microsoft would like, Gartner suggests the following: companies planning near-term upgrades on the likes of Office 97, NT 4.0 Server, Exchange 5.5 and SQL Server 7.5, for example, should consider buying Upgrade Advantage before the deadline. Companies planning upgrades on current products such as 2000 or XP should look at Software Assurance before the deadline.

Microsoft is plotting changes to its Premier Support option and weighing a plan to package support services with its volume licensing programs.

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