Windows' Software Assurance licensing plan seeds user revolt

by  Alan Zisman (c) 2005 First published in Business in Vancouver October 18-24, 2005; issue 834

High Tech Office column


The software on the millions of computers belonging to large organizations is licensed in a different way from the software on the computers in my home office, or in typical small businesses.

Generally, large organizations buy bulk licences from software vendors. It used to be that organizations would buy a licence for a piece of software just once. After that, they might pay a fee for support or pay again if they chose to upgrade to a newer version. Four years ago, though, Microsoft moved to a new model of licensing. Software Assurance required customers to pay 25 per cent to 33 per cent of the original licence cost each year to install and use whichever Microsoft product(s) they had licensed, while Microsoft provided support and any new versions of the products released over the life of their licence.

Now, with many companies reaching the end of their three-year licence agreements, some are questioning whether they've gotten their money's worth. Part of this is due to the slowdown of the formerly frantic pace of software upgrades. Microsoft's last major operating system release, Windows XP, for instance, came out in 2001, while release of the next version, Windows Vista (formerly known as Longhorn), has been postponed until late 2006.

"We've paid 29 per cent a year for three years, and for what?" wrote one reader to computer columnist Ed Foster. "Where's Longhorn? Where's Office 12? This has to be one of the biggest sucker jobs of all time, and they still have the gall to tell us we need to sign up again so as not to lose the 'value' of our investment. Who knows if there'll be any 'value' in anything they ship the next three years either."

Another commented: "Microsoft simply hasn't delivered what it promised. We didn't pay all this money to get TechNotes or training vouchers."

Microsoft product manager Sunny Charlebois told IT publication Computerworld that the company has been revising its licensing scheme in response to feedback from volume licensing customers as the company announced changes to ensure customers don't let their Software Assurance subscriptions lapse.

Announcing seven different versions of the upcoming Windows Vista, Microsoft stated that an Enterprise version, with features aimed at large organizational users, would be made available only to Software Assurance or Enterprise Agreement customers. Among the promised features: full volume encryption data protection, a potential benefit to users whose notebooks go missing, and a version of Virtual PC built-in, for users with applications that require older versions of Windows.

A special Windows Fundamentals for Legacy PCs is being readied, promising Windows XP-style security on hardware that is only capable for older, less-secure Windows versions. Starting next March, Software Assurance customers in organizations with at least 30,000 Windows or Office licences are promised additional training vouchers for organizations and 24/7 support instead of the current business hour-only help.

But Manitoba Hydro systems support specialist Robert Bagamery responded to the Software Assurance announcement, calling it "the latest Microsoft cash grab.... You shouldn't have a gun to your head," he said, noting companies should be able to buy Vista Enterprise and other enhanced features whether or not they subscribe to Software Assurance.

Gartner Inc. analyst Alvin Park told Computerworld that companies should carefully evaluate Software Assurance, because some of the new features could save money. But he can't issue a blanket recommendation: "Every customer is different in what they need and what they want."

Linuxworld magazine reports that at least one client, Australia's New South Wales Office of State Revenue, has concluded its better off moving to Linux on the desktop when its Software Assurance plan expires, citing costs estimated at one/sixth that of a Windows upgrade.