Microsoft claims licensing success

Microsoft has claimed that customers are buying into its new licensing model in increasing numbers ahead of the 31 July deadline, but has admitted that many are looking at other options.

Licensing manager Sue Page told vnunet.com: "We have seen a significant increase in the numbers of Upgrade Advantage [UA] and Software Assurance [SA] purchasers; more than a 30 per cent increase since the start of May and a seven-fold increase since this time last year."

Analysts had claimed that one in three customers will buy into the controversial licence programme before the deadline.

After 31 July companies wishing to upgrade software will have to buy completely new licences unless they are enrolled in one of Microsoft's maintenance programmes.

Page explained that the proportion of Microsoft UK's revenues that come from enterprise licences and annual payment licences such as UA and SA has doubled since the new pricing model began in October.

She said that the company's licensing call centre is fielding 1,400 calls a week, and that resellers are reporting a 10-fold increase in calls.

But according to a survey by Microsoft reseller Wstore, 30 per cent of customers have considered alternatives to the Redmond giant.

Page indicated that Microsoft is not concerned, however, because software purchases are not made on a simple price comparison.

"If 30 per cent are looking [at other software] we aren't worried. Looking at the options is a sensible business decision," she said.

"We know there is a group of customers that won't be doing anything because they've got a long upgrade cycle, and that's perfectly legitimate.

"The customers I'm worried about are the ones that want to upgrade in the next couple of years but aren't doing anything. They could be missing a good opportunity."

Page warned that, if customers leave the decision any longer, they could find key staff away on holiday when plans have to be made.

"Talk to resellers now," she said. "Even if you don't upgrade, don't leave it until the last day. Some of your key people might not be around to help with the decision."

Wstore chief executive Tony Price said: "Purchases of UA and SA are definitely increasing with customers trying to protect their investment.

"Some customers feel a bit forced, but know they've got to do it. But there are others that think it's great for their business. It's very busy at the moment."

Price added that many companies are diverting budgets previously meant for hardware into paying for the Microsoft licences.