Complaint over change to Microsoft licensing

By PETER GRIFFIN

Changes due this year to Microsoft's software licensing model have been branded as anti-competitive in a complaint to the Commerce Commission.

Auckland company Infraserv, an off-shoot of law firm Clendon Feeney, says the introduction of Software Assurance - a subscription-based upgrade service that asks users to pay licence fees to Microsoft two years in advance - could "have a chilling factor on both competition and entry into the market for at least the next four years".

Software users taking part would have to stump up a large investment in software without guarantees that new and appropriate upgrades would be forthcoming, Infraserv said.

Microsoft maintains the software-as-a-service model, which affects mainly corporate agreements, is the way forward for the industry, and that its customers will have a chance to save money and keep up-to-date with software trends.

But Infraserv's complaint urges the commission to take action to "to ensure that customers are not asked to pay for Software Assurance two years in advance when in all likelihood . . . some products will not be upgraded within the two-year period, resulting in payment for little benefit and the compulsion to pay yet a further two years in advance".

Software Assurance comes into effect on July 31. After that, Microsoft users who have not opted into Software Assurance must pay the full software licence fee rather than a cheaper upgrade licence fee.

Until now, Microsoft customers have been allowed to upgrade software as and when they choose. Many companies run well behind the upgrade cycle, preferring to stick to operating systems such as Windows 98 or Windows 2000.

Ross Peat, Microsoft's new managing director, said he was confident the company had complied with New Zealand law.

"We are happy to sit down with the Commerce Commission to explain the improvements to our new licensing programme and show how the programme is similar to those of our competitors."

A spokeswoman for the Commerce Commission, Jackie Maitland, said the complaint was being assessed to see whether an inquiry was necessary. A copy of Infraserv's complaint is available from Clendon Feeney's website.

Infraserv's complaint

Microsoft Licensing: An Overview of Software Assurance