Microsoft's new pricing model, Microsoft Licensing Program 6.0, went into effect on July 31, 2002, to the great consternation of many consumers. A quarter later, the numbers show the new model boosted Microsoft's quarterly earnings -- no big surprise.
However, the majority of small, midsize, and enterprise customers believe this plan will cause their costs to rise 20 to 200 percent, says Yankee Group report "Microsoft Licensing: Pay Now or Pay More Later."
The Microsoft program favors corporations that purchase in high volume and those that regularly upgrade every two to three years. Businesses that upgrade less often -- say, every four to six years -- and are therefore not on the most current versions of the software would pay significantly higher premiums.
"It's possible to get a good deal under the Microsoft Licensing 6.0 Program," says Laura DiDio, an application infrastructure and software platforms senior analyst and report author. "But to do so, it's absolutely essential that corporations have a thorough understanding of the terms and conditions of the new licensing program, and are fully compliant with their current licensing contracts. And they must be ready for long, tough negotiating sessions with their Microsoft sales representatives and/or resellers."
If you're a corporate account, you have three choices:
- Migrate to the Licensing Program 6.0, keeping in mind the warnings from DiDio.
- Don't upgrade, and risk running your software in an unsupported environment.
- Switch to alternate products.
More than one-third of corporate accounts won't move, and another 38 percent may switch to other products, says a Yankee Group/Sunbelt Software survey of 1,500 IT managers.
For tips on how to negotiate a deal that's right for you under Licensing 6.0, see Lee Barken's "Making Sense of Microsoft Licensing" at http://Advisor.com/doc/10059.