Microsoft Tight-Lipped on Licensing Numbers

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.

Resource Library:

Related Stories:

Microsofts Licensing Deadline Arrives (PC Magazine)

How Will Microsofts Licensing Plan Affect Office? Extreme Tech

MS Licenses Lapse—Whats Next? (Baseline)

Reader Comments: Microsoft Tight-Lipped on Licensing Numbers >>> Be the FIRST to comment on this article!

>>> More Application Development Articles          >>> More By Peter Galli