Users slam Microsoft licensing moves

Users voiced suspicion, and some indifference, towards Microsoft's new volume licensing and upgrade model, calling it a mere revenue-making move by the vendor.

Under the new subscription-based policy known as the Upgrade Advantage System (UAS), customers will have to buy full licences and full software packages to get the latest version of software. The new policy comes into force on October 1, 2001.

However, even for those customers who do subscribe to the UAS, the offer is limited to a two-year period from the date of the software purchase.

This means users who lack the capacity to upgrade frequently, will need to fork out extra cash for new software.

Nonetheless, Microsoft marketing executives are touting the new policy as simpler for the customer, particularly for small to medium-sized (SME) businesses - cutting down the current "alphabet soup of upgrades" and frustration of navigating upgrades.

Gartner analysts in the US, meanwhile, say that only customers who upgrade frequently will be better off under the new program.

Ray Beatty, secretary and committee member of the Melbourne PC User Group (whose 11,500-strong base worldwide attracts IT executives from the corporate, government and SME sectors) said members were highly suspicious of the software giant's new licensing model.

"All we know is that you buy the software and then there'll be all sorts of costs - and we don't know what they'll be," he said.

Beatty told Computerworld that the user group quizzed a Microsoft technical staffer demonstrating products at a members' meeting in September 2000, demanding to know how the new model would impact their hip-pocket - but to no avail.

"The engineer gave a vague explanation of how it would change things, but there were rumblings of opposition from the crowd," he said.

Beatty believes software vendors in general are trying to lock the customer into inflexible licensing arrangements, adding that they have the ability to do this because of their relative "monopoly status".

He claimed: "Microsoft and other big vendors are already locking us into Word and Excel - they have a relative monopoly in the word processing, spreadsheet and operating system market."

"You try and go against this, you'll get your nose cut off."

According to Beatty, users would prefer the vendor return to the traditional out-of-the-box selling model, as some users lacked the time or resources to maintain complicated licensing accounts.

While he conceded that users might be overreacting, he said their concerns were justified in light of their uncertainty around the financial impact of the new program or whether Microsoft would change the model again.

"Generally, upgrade products offer little benefits except a few tweaks here and there, and most of the time screw up systems with bugs."

Federal Court of Australia IT director Graham Harrison said he had no qualms over the policy change as the court did not have the luxury of a budget for frequent upgrades.

The court will continue licensing programs like Windows on a Select volume licence, bought outright, as Harrison sees this as operationally adequate and cheaper in the long term.

"We do get the advantage of service pack releases," he said. "But if we were constantly upgrading to every new platform version that comes along it would be too expensive."

"Besides, large organisations like us tend to be stable and don't have the latitude to migrate to say Windows 2000 when we feel like it - this has to be budgeted for each financial year." - Wendy Brewer contributed to this article.

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