A few upsides to the upgrade ugliness

On Monday Microsoft proudly announced the participation of Prime Minister Jean Chretien in an upcoming conference with Bill Gates called CAN>WIN. The company was less self-congratulatory about the changes to its licensing program that take effect on Wednesday, which I will hereafter refer to as


The program has a real name, of course. It’s called Software Assurance, part of the overall Licensing 6 plan that include Open, Select and Enterprise Agreements. In a nutshell, Software Assurance gets rid of the most popular way of buying Microsoft products — the pay-as-you-go method — and replaces it with a sort of subscription service. The financial impact will be different for every enterprise, but analysts like Gartner Inc. say the costs could jump as high as 107 per cent.

Customer feedback on the changes has been so contentious that Microsoft has granted two extensions over the last year so customers could get a better understanding of their options. Well, with less than 24 hours to make a decision, here they are: CIOs can upgrade more often than they want to at a discount, or pay full price. This is why NO>WIN seems the better brand name.

I’ve already discussed what I see as the disturbing precedent this sets for the software industry, and how it demonstrates Microsoft’s complete lack of respect for its customers. Studies from Sunbelt Software and the Yankee Group indicate most users hate the new program and that almost two-thirds aren’t going to sign up. That’s not necessarily bad news for Microsoft, since it may force them to pay more anyway. Since we’re in a NO>WIN situation, perhaps it would be better if I used this opportunity to identify the few good things that have come out of this mess.

The industry did some housecleaning. Like it or not, the prospect of licensing changes forced many enterprise organizations to catch up on just how many licences they have, and what aspects of the plan they fall under. SoftChoice, AssetMetrix and other Canadian companies jumped in with tools to help with this process, which could represent the beginnings of an industry-wide push towards better IT asset management.

CIOs were put on guard. The drastic and unexpected removal of key licensing options had to have taken many IT executives by surprise. Their budgets already in chaos, this past year has been an ongoing process of learning how to allocate resources effectively. They are almost certainly aware this is probably not the last time Microsoft (and other companies) will adjust policies without regard to their complaints. They will hereafter plan for the worst, if they weren’t doing so already.

Linux got a second look. It’s unlikely that many major organizations will immediately switch over to the open source OS, but the relative lack of bureaucracy around Linux had to appear better than dealing with Microsoft. If enterprises hadn’t considered using Linux (or even Sun Microsystems’ StarOffice) before, they probably will at least explore the possibilities now.

Expectations have been raised. Customers have always seemed to grudgingly accept the fact that Microsoft OS releases are chronically late, filled with bugs, or both when they do emerge. This could change if they choose Software Assurance if Microsoft misses future deadlines, thereby leaving them on the hook when the software arrives after their two-year upgrade cycle has expired. If it does arrive but doesn’t work properly, it could further erode the company’s Trustworthy Computing initiative and its customers’ loyalty. In the end, NO>WIN could apply to Microsoft as well.

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Jim Love, Chief Content Officer, IT World Canada

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Shane Schick
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