Microsoft licence changes loom

'Licensing 6.0' is the downbeat name given to the changes in Microsoft's licensing strategy that have created unprecedented levels of anger in its corporate user base.

The new policy was announced in May last year, and it was not long before the howls of anguish from Microsoft's private and public sector customers began.

Members of blue chip user group The Infrastructure Forum (Tif) calculated that the changes would cost up to 130 per cent extra, although Microsoft insists that the the new model will have no effect on half of its customers and that 30 per cent will be better off.

After much debate, Microsoft agreed to extend the licensing transition period to 31 July this year, but has made it clear that no more last minute changes of heart will occur.

Explaining that companies have to decide on their licence policy now, Microsoft licensing manager Sue Page said: "There will be no more concessions. A lot of companies are still not aware of the deadline. It's getting close now and people should think about it.

"Companies should take stock of where they are now and, even if they decide to do nothing, then they've made that decision consciously."

After 31 July, users will have to buy a new full licence to upgrade unless they have bought into a licensing programme that includes software maintenance.

Up to this date, users can buy Upgrade Advantage or Software Assurance to get software maintenance, which also buys the rights to any new versions of the software released during the life of the contract.

Microsoft has maintained that these options will save money compared with the cost of a full licence or a licence and Software Assurance after 31 July.

Software maintenance is included in Open Subscription licence, Enterprise Agreement and Campus/School agreements, so organisations with these deals don't need Upgrade Advantage or Software Assurance.

Some have predicted that the private sector, left out of the giant cut-price deals signed between the government and Microsoft, will react to the changes by cutting back as much as they can on licences.

Tif has written to its members reminding them of the cut-off date. David Roberts, chief executive at Tif, said: "Most member organisations are aware of what they should be doing and how to get there: buy what you need, when you need it.

"That's the way to manage the cost and, in some cases, manage the cost down."

He added that previously members would buy all products for all desktops and servers. "But that's where it becomes expensive," he warned.

Page said that Microsoft's licensing hotline is already taking 100 calls a week, which will rise when it sends out 150,000 brochures warning of the changes.

She claimed that Licensing 6.0 will simplify options for customers. "We had thousands of upgrade options and the reason this has been brought in is to simplify it," she said.

"If you are looking to upgrade to Office XP in the next couple of years you should look at Upgrade Advantage and Software Assurance because it's a financial no-brainer."

Adrian Tatum, partner development director at Computacenter, Microsoft's largest reseller in the UK, indicated that most customers have accepted the change.

"People are saying that perhaps they didn't like the change when it came in, but now it's given them a viable way of budgeting for software in the future," he explained.

"They have looked at other operating systems and realised that they aren't viable for enterprises. The corporate market has come round to think that this will help its budgeting. It gives them more predictability."

Tatum pointed out that 50 to 60 per cent of customers are buying Upgrade Advantage, and 30 to 35 per cent are buying enterprise agreements.

"The rest are enterprises not doing anything and will re-buy the software when they come to move to new versions," he said.