Microsoft entices users to upgrade servers

Starting July 1, Microsoft will launch a promotional program that could benefit companies that want to upgrade from the standard to enterprise editions of its server software products.

Through the new Step-up License program, users who purchased Software Assurance or an Enterprise agreement for the standard edition of a Microsoft server product will be able to upgrade to the enterprise edition by paying only the price differential.

Under the existing system, customers must buy a new license when moving from the standard edition of a server product to the enterprise edition.

"I wish I would have heard this a month ago," said Steven Edwards, vice president and IT director at Solomon Cordwell Buenz & Associates Inc. "We just had to rebuy our licenses for (a Windows) server and for Exchange for clusters. It was expensive and painful."

The Chicago architectural firm, which has 117 employees, wanted to run Exchange Server in a clustered environment so that if one messaging server went down, a second would kick in within seconds. But the enterprise editions of Exchange and the Windows server operating system are required for clustering.

So the firm in late April spent US$12,000 for two new Exchange and two new Windows server enterprise licenses, knowing that the purchase would render its old Software Assurance-protected Exchange standard licenses useless, Edwards said.

He said the unplanned expense also forced the firm to postpone purchasing Software Assurance on the new servers.

"If we added Software Assurance on top of that, it would have been another 50 percent of the (license) cost (over two years), and we were already over budget buying two of everything," he said.

Customers pay an annual fee of 25 percent of the volume licensing cost to get Software Assurance, which entitles them to all upgrades released during the contract time frame and some new, free support and training options.

Rebecca LaBrunerie, product manager of worldwide licensing and pricing at Microsoft, said the new program is intended to help customers in situations just like the one Solomon Cordwell Buenz faced.

"If the customer is off by a few weeks of when we announced that license program, I'm sure we will work with that customer to make sure that they can receive the benefits of this program," she said.

A vice president of IT procurement at a multinational media conglomerate, who asked not to be identified, said that if his company had access to the Step-up License program sooner, it might have made different decisions last year when it purchased 18 SQL Server Enterprise Edition CPU licenses for an IT project. The cost differential between the standard and enterprise editions can be "huge," he said.

Joe Brenner, MIS manager at Sleepeck Printing Co. in Bellwood, Ill., said he likes the idea of the added flexibility. So far, most of the company's servers run only single applications, so it hasn't needed the additional features of the enterprise edition. "That may change in the future," he said.

The Step-up License program is scheduled to be available only through September 2004. But Alvin Park, an analyst at Stamford, Conn.-based Gartner Inc., said he thinks Microsoft should make the Step-up License permanent.

Park said Microsoft also should expand the Step-up License beyond server software to other products. He noted that the Step-up License essentially reinstitutes the Product Upgrade Program that the company eliminated on Sept. 30, 2001.

"If customers tell us they want us to keep it permanently, we'll look at that," said LaBrunerie. She added that Microsoft will also consider extending the Step-up License to additional products.

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