Microsoft Tight-Lipped on Licensing Numbers

By Peter Galli  |  Posted 2002-08-02 Print this article Print

But with surveys citing customer resistance to the plan, Microsoft competitors are turning up the heat.

Microsoft Corp. is being tight-lipped about how many of its business customers have signed up for its controversial Licensing 6 and Software Assurance program. The cut-off point for customers to ink a deal, which essentially committed them to a two- or three-year annual contract with the right to upgrade every time to a new version of the software, was on Wednesday. Those who have not signed up will now have to pay the full price for future upgrades. A Microsoft spokesman on Friday declined to break out the numbers, saying this was against company policy. But she referred eWeek to comments made by Microsoft CEO Steve Ballmer at the recent analysts day held at the Redmond, Wash. campus.
"The fundamental principle of simplifying our licensing will be of value. But a transition never makes things simpler," Ballmer said at the time. "I think the fact that our customers probably didnt understand our licensing as well as they might have earlier makes the transition and the perceived pain actually higher than perhaps the real pain."
But he admitted that Microsoft had made mistakes around selling and explaining the plan, saying that the company was enduring "short-term pain and I feel badly about that. I know things we would do differently if we did it again," he said. However, many customers were seeing lower priced alternatives under the plan than they had before, he said. But recent surveys have shown there is a lot of customer resistance to the plan. A survey of more than 4,000 IT managers by Windows consulting company Sunbelt Software and Giga Information Group found that more than half of those polled were not going to sign up for Licensing 6. Research firm Gartner Group has previously said the Licensing 6 plan could raise volume-licensing fees anywhere from 33 percent to 107 percent. Gartner analysts have recently warned that clients who miss the July 31 deadline could pay up to 45 percent more for their licenses at their next upgrade cycle. Some Windows users are also concerned enough with Microsofts Licensing 6.0 program that they are evaluating alternatives, said International Data Corp. system software research director Al Gillen. As such, Microsoft competitors are also turning up the heat and aggressively trying to lure Microsoft enterprise customers onto their software products. Open source desktop firm Ximian Inc. recently launched the Y2Pay Program, which offers product discounts and is designed to entice companies to pilot Ximian Desktop and Linux. That, it is hoped, will enable them to make an informed move to Linux, company officials said. Canadian-based software maker Corel this week also announced that from Aug. 1 to Oct. 31, customers who currently own Microsoft Enterprise Agreements could deploy its WordPerfect 10 word-processing application for a free trial across their organizations. Sun Microsystems Inc. also announced its intent to do battle with Microsoft on the enterprise office productivity user front earlier this year when it released branded StarOffice 6.0 software suite. Mike Rogers, vice president and general manager of desktop and office productivity at Sun in Santa Clara, Calif., said Sun was taking direct aim at Microsoft Offices corporate and enterprise installed base with its new offering, which costs significantly less than Microsoft Office. Related Stories:
  • Microsofts Licensing Deadline Arrives (PC Magazine)
  • How Will Microsofts Licensing Plan Affect Office? Extreme Tech
  • MS Licenses Lapse—Whats Next? (Baseline)
    Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

    He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

    He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

    He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

    He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

    He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

    His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

    For numerous examples of his writing you can search under his name at the eWEEK Website at


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