Businesses that want the Enterprise Edition of Microsoft's forthcoming Windows Vista operating system will have to sign up for its Software Assurance licensing program, the company announced on Thursday.
Software Assurance, which was first introduced in 2001, encourages customers to pay an annual fee to use Microsoft's software rather than buying outright licenses. The annual fee includes software upgrades plus other support services.
The program has been a controversial one and met with considerable resistance after some analysts said customers would end up paying more under Software Assurance than under the previous licensing plan.
It appears now that Microsoft is not just encouraging customers to use the program but requiring them to, at least if they want access to its newest products, analysts said.
"If anyone wants to move onto the next generation software, then they've got no alternative" but to sign up for Software Assurance, said Michael Azoff, senior research analyst with Butler Group, in England. "It's sort of a clever move by Microsoft."
Robert Bagamery, who provides system support for Manitoba Hydro, a large utility company operating in Canada's Manitoba province, said Thursday that his company did not purchase Software Assurance when it was made available because it was not viewed as a sound investment.
Bagamery said in an interview that he is outraged by what he views as a way for Microsoft to make easy money by requiring enterprises to pay for Software Assurance without a guarantee they will use what the program has to offer.
"It's just throwing money at [Microsoft] and saying, 'Here, take all of our money, don't give us anything for it,' " he said.
"The repercussions for people with corporate licenses are incredible."
Microsoft Chairman and chief software architect Bill Gates showed off Windows Vista at the company's Professional Developers Conference in Los Angeles on Tuesday. The client software includes a new user interface and several promised security and productivity benefits. It is expected to be out in the second half of next year.
"Windows Vista Enterprise is available exclusively as a benefit of Software Assurance and is designed to help midsize and larger organizations significantly lower IT costs and improve IT efficiency," the company said in a statement Thursday.
The change was among several updates announced for the licensing program. Taken together, the updates "extend the value" of Software Assurance beyond a typical maintenance offering, which includes only support and upgrades, according to Microsoft, to something that includes access to support, new product versions and other resources.
The new offerings include consulting programs, extended training, around-the-clock phone support, tools for securing and managing older PCs and new upgrade licensing policies for moving from standard to enterprise editions of its software, the company said.
Microsoft is planning a raft of major product introductions over the next year, including upgrades to its database, operating systems, Office software and tools, and the new training services in particular may help customers understand the new products and how they may help them, said Bola Rotibi, a senior analyst with research firm Ovum.
Some of the upgraded services became available in July, while others will become available later this year and in March 2006, Microsoft said in a statement.