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WEST COAST COOLER: The great licensing dilemma

WEST COAST COOLER: The great licensing dilemma

Beyond the vagaries of Microsoft's technical roadmap, licensing is one of the biggest aggravations facing IT decision-makers.

An almost unprecedented wave of user backlash peaked on July 31 as the deadline for subscription to Microsoft's controversial Software Assurance program expired. At its core was a requirement for companies to enter into a contractual arrangement to purchase volume upgrades of its operating systems and application suites. The deal included an annual fee rather than the model that has otherwise remained pervasive in the software industry: buy the upgrade whenever you see fit.

The timing could not have been worse. Microsoft has recently been working feverishly to redeem itself from years of security woes. The results of its security flaws have inflicted countless viruses, DNS attacks and network intrusions on the corporate world.

As a result, IT executives turned out in force in the press and online newsgroups to register the "no" vote.

Barry Hewitt, a LAN administrator with a large regional medical equipment distributor in Chicago, says the licensing plan is hardly going to make him a loyal Microsoft customer. "I don't like the restrictive nature of the [Software Assurance] plan, but it wouldn't make me throw out some huge investments I have in their servers either. However, let's just say I might be more open to considering some other [server] alternatives if they came along."

"I rate the anger and animosity from users over the licensing plan to be more serious than competing in an open standards world," says Dwight Davis, a vice president with Summit Technology in Boston. Davis added that the licensing policies may have the effect of causing users to actively consider alternatives, particularly when it comes to server environments.

Microsoft's .Net Server operating system is a good case in point. Due to hit the streets in late December, .Net Server is designed to form the technical underpinnings of a raft of application-specific .Net servers, such as Exchange Server, Commerce Server and the forthcoming Yukon database.

A steady stream of committed, licensed enterprises has the potential to overcome one of Microsoft's greatest practical challenges: upgrades.

George Dover, a developer with the Bonneville Power Administration, a division of the US Department of Energy, reflects that sentiment. "We're not planning on moving to .Net Server for at least another year," Dover says. "Our goal is to take everything off Windows NT 4 first."

Bill Veghte, vice president of Microsoft's Windows .Net Server division, admits that "upgrading is a big challenge". "What does a giant blob of Windows servers mean?" Veghte asks rhetorically, referring to the set of .Net servers. The answer, he says, is to improve the messaging around each of the .Net servers to fortify the specific value propositions they hold. In addition, Microsoft is working to ensure its .Net servers are integrated to the extent that the whole is greater than the sum of the parts.

This integration theme is one that chairman Bill Gates and CEO Steve Ballmer trumpeted at the company's .Net briefing day in July. The only way to maintain Microsoft's growth and preserve shareholder value is to innovate around what they call "user scenarios".

Seamless integration of Microsoft's applications, server platforms and operating systems, underpinned by XML, would improve the exchange of data and deliver new sets of applications not yet seen, they argue.

But the dream of integrating your calendar, CRM application, database and Word documents are yet to sink into the enterprise mindset.

Industry analyst Gartner has reported that users failing to commit to Software Assurance could see upgrade costs rise from between 30 and 100 per cent. That might be good news for channel partners, but it's enough to make users think twice.

If recent news concerning Microsoft cancelling its Office suite subscription trial is any indication, it will take a lot more than improved security and innovative product integration to lock customers into the new upgrade cycle.

Mark Jones, InfoWorld's US West Coast news editor and a former editor of ARN, can be reached at mark_jones@infoworld.com.


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