Microsoft Puts New Twist on Licensing Plans

By Peter Galli  |  Posted 2002-12-09 Print this article Print

Microsoft Corp., which has been trying to repair its relationship with customers who are facing higher software costs for refusing to upgrade to its Licensing 6 plan, has hit them with another licensing change.

Microsoft Corp., which has been trying to repair its relationship with customers who are facing higher software costs for refusing to upgrade to its Licensing 6 plan, has hit them with another licensing change.

The Redmond, Wash., software maker last week announced licensing changes to the upcoming Windows .Net Server 2003 family, due for release in April, that will require a TS CAL (Terminal Server Client Access License) for all client devices that access the server, regardless of which Windows version is used.

This is a shift from the previous situation, in which users deploying both Windows NT 4.0 and Windows 2000 on the client and server were automatically granted user access rights to Terminal Services at no cost.

Microsoft customers said charging for each Windows client to access Terminal Server in .Net Server 2003 appears to be another attempt to push customers not yet running Windows XP to upgrade.

To encourage users to upgrade, Microsoft is offering a free Windows .Net Server 2003 TS CAL if they already have Windows XP Professional, have their Windows desktop under an Enterprise Agreement or Software Assurance plan, or buy Windows XP Pro before the server is available.

Those who do not upgrade but still want or need to use the Terminal Server functionality will then have to pay for this access. Microsoft officials would not say what the move will cost customers.

This licensing change follows Microsofts controversial Licensing 6 program, which took effect in August. Customers had to sign up for two- or three-year Software Assurance maintenance contracts, which allowed them to receive all applicable product upgrades over that period. Those who refused to sign on will have to pay the full price for future upgrades.

Microsoft has admitted that the changes were poorly handled and that small and medium-size companies had been hit with price increases.

Research company Gartner Inc., in Stamford, Conn., estimates that the program hiked fees for many businesses by 33 to 107 percent. An analyst, Laura DiDio at The Yankee Group, in Boston, estimated that as many as two-thirds of Microsoft customers did not sign up for Licensing 6.

Microsoft defended the latest move last week. Bob OBrien, group product manager for Windows .Net Server, told eWeek the plans are in the best interests of customers because they simplify Terminal Server licensing.

Many customers disagree. Jack Beckman, manager of application programming at Service Centers Corp., in Southfield, Mich., said his company is unhappy about getting pressured into Microsofts latest licensing plan earlier this year.

"This just seems like another twist of the knife," Beckman said. "I dont see how this simplifies anything.

Well probably ... not deploy .Net Server," he said. "We are just in the process of upgrading many of our servers to Windows 2000 from [Windows] NT 4, and I dont think anyone will be real keen on another round of upgrades so soon after."

Others simply want to move away from Microsoft products. Jim Lambright, MIS manager for Roth Manufacturing Corp., in New London, Ohio, has a large group of computers that need Terminal Services to access its finance/project software in another state. "I really dont like the current TS," Lambright said. "Its kind of cranky at times and, in our case, dirt slow."

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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