Licence regime turns off buyers

By RICHARD WOOD

As the Government tries to get more value out of its Microsoft purchasing, there is rising concern among IT managers over the company's Software Assurance licensing scheme.

The scheme comes into effect on July 31 and will make up 29 per cent of the total cost of annual software licensing fees. The major benefit is the availability of future upgrades, but there are concerns that customers who do not pay the fees will have to pay the full price of upgrades.



Peter Hind, an analyst for research company IDC, surveys IT managers regularly and said the problem was loss of autonomy on upgrading.

"Microsoft seems to want to accelerate the uptake of new operating systems," he said. "It's a failure to recognise that business is saying, 'we're not going to spend two, three, four million dollars to get into an upgrade gravy train so people like Microsoft and Intel can get revenue'."

Stagecoach and Fullers group IT manager Stan Low said he would not be buying Software Assurance and would divert the budget into investigating Open Source.

"If they didn't bring out Software Assurance I wouldn't have looked at alternatives," he said. "By eliminating the right to upgrade if we don't subscribe, they are forcing IT managers to review their positions."

NZI IT services manager David Fletcher is another unhappy customer. He has taken the issue through the company's British parent after not getting satisfaction from Microsoft locally. Fletcher said local chief information officers were only just now understanding the implications of the Software Assurance regime.

"I don't have a problem with their product but I certainly have a problem with the way they went around changing the licensing regime. They expect you to pay for a product three years in a row for something they may never deliver."

The saga was a boon for Open Source and Linux.

"What Microsoft has done is awaken another giant out there, and I think the whole thing has been a bad marketing mistake.

"They've just looked at America and they haven't thought about the rest of the world and the rest of the world tends to stand up where Americans sort of follow on."

Microsoft New Zealand managing director Ross Peat was unavailable for comment.