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By David Coursey  |  Posted 2004-07-07 Print this article Print

Customer challenges—The Microsoft packaged software business model is broken, and Redmonds attempts to fix it thus far havent worked. Peter Gallis story about the woes faced by the Software Assurance program point out the difficulty Microsoft is facing in transitioning customers from individual software purchases to ongoing subscriptions. Click here to read Peter Gallis story "Users Balk at Software Assurance."
This is something Microsoft needs to make happen, and customers are predictably loath to sign up for. Microsoft needs predictable, ongoing revenue from enterprise customers. These customers like the pay-as-you-go model and want to hold onto it. They see subscriptions as paying for software in advance whether or not they actually end up using it.
So Microsoft foisted SA onto a mostly unwilling body of enterprise customers and then, in the opinion of many, underdelivered. A bad first impression is hard to erase, and leaving a sour taste in the mouths of software subscribers is a major failure. In short: Microsoft must find a way to generate predictable, ongoing revenue from enterprise customers. If not, serious troubles follow in a five-year horizon. Next Page: The Globalization—or Linux—Threat.

One of technology's most recognized bylines, David Coursey is Special Correspondent for, where he writes a daily Blog ( and twice-weekly column. He is also Editor/Publisher of the Technology Insights newsletter and President of DCC, Inc., a professional services and consulting firm.

Former Executive Editor of ZDNet AnchorDesk, Coursey has also been Executive Producer of a number of industry conferences, including DEMO, Showcase, and Digital Living Room. Coursey's columns have been quoted by both Bill Gates and Steve Jobs and he has appeared on ABC News Nightline, CNN, CBS News, and other broadcasts as an expert on computing and the Internet. He has also written for InfoWorld, USA Today, PC World, Computerworld, and a number of other publications. His Web site is

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