United We Stand, Divided We Get Scammed

The latest software pricing scheme—Microsofts Software Assurance program—has many of us angry at the thought of being held hostage to unfair licensing practices. Its a trick thats already been attempted: Earlier this year, Oracle came under attack when it tried to impose a new pricing mechanism that used a universal power unit, or UPU, measurement to increase licensing costs.

But Oracle and, more recently, Microsoft experienced a sobering dose of user mutiny based on the unification of frustrated software users. User wrath forced Microsoft to ease up on this unpopular plan, which it did by switching the sign-up deadline from the original Feb. 28 date to July 31 and by removing Office XP upgrade requirements.

Other vendors take heed. Dont mess with licensing costs in a weak economy. Sure, everyone is struggling with the economy, and all businesses need to evaluate the bottom line. Most of us get that. But dont underestimate users ability to see through a poorly implemented pricing adjustment.

Tiered pricing still exists today, mostly in the mainframe world. Despite the dislike for such licensing, Oracle had the nerve to use the UPU scheme in the same manner. Under the UPU formula, my organization was going to have to buy more Oracle licenses than there were employees. Thank goodness that senior IT execs everywhere saw through this sham, and Oracle came to its senses by basing licensing cost on a per-server basis rather than on the size of the server.

Now, Microsoft is trying to run the "maintenance cost" game via Software Assurance. Again, this idea was born decades ago when vendors were assessing users a yearly charge based on a percentage of the current purchase price. This afforded vendors a guaranteed revenue stream. The Redmond gang tried to push the maintenance program, price hikes and a drop-dead date all at the same time. My advice to software vendors is to phase in pricing adjustments.

Its about standing together and letting software vendors know that loyal organizations cant be bushwhacked into half-baked licensing schemes. Let your vendor sales rep know how you feel, and dont be so quick to sign new agreements. Chances are that the vendor will rethink any pricing adjustment if there is significant resistance or few takers. Times are tough, but Americans, especially we software users, wont fold under the pressure.