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Follow UsOn October 8 this year, Microsoft made an announcement–it
was globally extending the deadline for its mandatory software assurance
agreement from February 28, 2002 to July 31, 2002. And while the company had
earlier decided to make it was essential for the users to migrate to Office XP
before they could sign the SA, the new announcement extended the definition of
‘current’ platform to include Office 2000 also. However, this did not ease
the situation as per Microsoft’s expectations–globally as well as in India.
Users are angry and protest is coming in thick at being ‘arm-twisted’ into
signing the agreement that would commit them to upgrades for the next two years.
In fact, by Microsoft’s own admission around 40-45 % of the
current installed base of computers in India still runs on Windows 95. However,
according to market estimates upgrade sales in the country currently hover only
in the range of 10-15 %, proving that the two-year upgrades touted by the
company is not necessary. Resentment is also being expressed at the high license
fee fixed by Microsoft. Most of the CIOs contacted by Dataquest said 29% of the
base cost of the license is too high for SA since other software packages offer
annual maintenance contract (AMC) packages in the range of 15 %.
Enterprise
users also argue that as the number of Microsoft users in an organization is
much larger than an Oracle or an ERP deployment a high price tag compared to
them is not justified. Anand Sankararaman, chief of IT at HDFC Bank has another
issue to raise, ‘‘The new SA will work out to be expensive considering the
coverage is only for two years.’’
There is a lot of confusion about the new licensing policy
amongst the enterprises and CIOs. There is also a discernible sense of distrust
among customers. Corporate India also alleges that Microsoft has not attempted
to educate its users about the new licensing policy. The only interaction they
seem to have had was in the form of initial mailers informing them about the
September 28, 2000 deadline to sign up for SA. The policy has since then been
revamped and Microsoft had to defer it twice to pacify its users.
| What the New Policy Entails... |
| Microsoft’s new licensing policy for enterprises does away with version upgrades. What this means is that users will now be paying a yearly fee to all upgrades as they are released. The new plan also replaces three of the four popular version upgrade deals which allowed users to upgrade on an ad hoc basis and at their own pace. The existing maintenance plan called Upgrade Advantage is valid till July 31 2002. To qualify for the SA after the launch period, customers will have to pay the full license fee for the current version of the product which otherwise is 29% of the base cost for desktop software and 25% for the server version. Microsoft has also lowered the entry point for enterprise deals from 500 seats to 250. Although Microsoft says the latest change in licensing plans was to accommodate customer feedback and to simplify the licensing process market observers contend that it is more to reduce user’s options and prod them towards an exclusively subscription-based pricing model. |
When contacted, MS officials refuted the charges. Deepak
Shagrithaya, Microsoft program manager (licensing), said: ‘‘We have held
numerous interactions with the industry, educating them about our licensing
policy and helping them choose the best option. We have close to 25 such
programs each month.’’
Enough’s enough
Clearly, MS customers feel the company has been pushing
things too hard. Alleges K P Unnikrishnan, Country Head (Marketing) at Sun
Microsystems, ‘‘Microsoft’s long term goal is to force people to use
Passport and ultimately make it mandatory for them to move to XP by removing
support for its earlier versions of software.’’ And while substantial number
of customers are planning to sign on the dotted lines for SA, majority of the
CIOs feel that further attempts by Microsoft to bully users would trigger off
hunt for alternatives. Linux, for example, could be one.
Experts suggest that it is only a matter of time before Linux
that has been increasing its presence in non-critical application area starts
making its presence felt in critical applications areas too. In fact, IS India
members have already taken the first step forward and most of them are seriously
evaluating the use of Linux and Lotus Suite.
Mr Bill Gates, are you listening?
CNS