Microsoft licensing changes: It’s crunch time

Microsoft Corp. software users who complain about the cost of the company’s licenses need only sit back and do nothing for the next week to discover real software sticker shock.

After next Wednesday, Microsoft’s new Volume

Licensing program will be implemented and licenses from the Redmond, Wash.-based software giant will become a whole lot more expensive. It’s a reality Microsoft customers seem to be coming to grips with, according to Paul Bodnoff, president of Ottawa-based IT asset management firm AssetMetrix Inc.

“”We saw that the press was talking about customers waiting to do it,”” he said. “”Then people realized that there are considerable savings with getting things done.””

In response, AssetMetrix, listed along with Vancouver’s Absolute Software Corp., Seatle’s Express Metrix LCC and a number of other asset management firms on Microsoft’s Web site, earlier this month began offering LicenseTracker, an á la carte piece of its management service.

“”What we did is take a piece of what we do and say, ‘Here is a way for people to get a handle on their negotiations with Microsoft,'”” Bodnoff said. “”Part of the problem with licensing is how many have they got and where they are. This helps them answer that question.””

The AssetMetrix LicenseTracker, which costs $2 per PC per 30-day subscription, is a download smaller than 200kb that audits PCs via e-mail, LAN or diskette. The company claims its AssetAgent technology collects more than 250 data points for each PC, categorizing 78,000 software titles from 12,000 vendors. The information is funneled to an AssetMetrix database and organized for users to access.

Bodnoff said the technology works fast enough that a company could call at 8:00 a.m. and have a complete audit, including licenses, of 10,000 PC by the end of the workday. Full subscriptions involve a more robust analysis that covers CPUs, cluster information and assessments of both hardware and software costs of upgrades.

But Bodnoff admits the big concern right now is Microsoft. Current customers can update licenses through the Enterprise Agreement, Business Open License and Select License programs. The programs differ in a number of criteria, including the length of agreement, minimum number of license purchases and whether users must sign a contract. In every case, however, it will be much more costly if users wait until after July 31st.

For example, if a firm has 10 current Office Professional licenses, 20 prior licenses and five unlicensed editions, the Open License program cost before July 31st is about $19,000 and more than $40,000 after their deadline. The Select License cost before the deadline is about $18,000 compared to $38,000 after July 31st.

According to Microsoft, most customers won’t pay more under the new licensing system, which scraps the four-year upgrade cycle and gives business users the choice between two-year maintenance contracts or paying full price for upgrades. However the new licensing structure caused enough of an uproar among customers that Microsoft extended the Software Assurance/ Upgrade Advantage deadlines from last fall to the end of this month.

Bill Depatie, Microsoft Canada Co.‘s manager of channel sales, said the company is currently pleased with the uptake of annuity licenses, which include maintenance.

“”We saw a significant increase of activity in June, and we think that is a reflection of the information we’ve put in the marketplace,”” he said. “”We’re seeing that acquisition is a little bit ahead of where we predicted.””

The July 31 deadline, which Depatie said is firm, has also spawned the emergence of tools designed to help enterprises get a handle on their licenses. Late last month, Toronto-based Softchoice launched its Licensing Wizard, a Web-based tool that enables users to plug in the number of current licenses, prior licenses and unlicensed Microsoft products they have and receive a cost-free assessment of upgrade costs before and after the July 31 deadline.

While useful, the Softchoice tool can only be effective when users already have a tally on their licenses, according to Bodnoff.

“”What they don’t have is the ability to go out and discover,”” he said. “”We’ll tell you, ‘Someone has gone and passes this CD around. You might want to clear that up.'””

Bodnoff also stresses that LicenseTracker does not require the customer to purchase servers, manage software or deploy staff. “”It’s zero impact on their organization,”” he said.

Bodnoff acknowledged some companies initially have reservations about allowing foreign software to examine their licensing situations, fears he says are allayed by his company’s commitment to privacy.

“”All the info we collect is confidential; we’re not part of the police,”” he said. “”We’d be out of business in a minute if people thought we were handing this information to Microsoft.””

However, Bodnoff said he doubts most companies are trying to hide anything anyway.

“”By and large, most companies want to be compliant,”” he said. “”The challenge is, ‘I want to be compliant but I have no way to do it in a timely fashion.'””

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