Microsoft: The Next Investigations

Runt-Abu writes: "Some of the UK's top companies (and some of the not-so-top as well but hey...) are questioning Microsoft's policy on pricing. In an open letter to the Secretary of State for Trade and Industry several of the top companies voiced concern at the cost of an extra £880m over a typical four-year investment cycle. No one from Microsoft has commented at this time, given the current state of affairs it's highly likely many companies will not upgrade or seek alternative cheaper solutions." Basically, a large trade group is asking the British Office of Fair Trading (akin to the FTC in the U.S.) to investigate Microsoft's price increases. And Gogl writes: "It appears the attorneys general of 6 more states have voiced concern over Microsoft, particularly regarding the upcoming release of Windows XP. Microsoft and their allies claim that AOL-Time Warner was behind this, which AOL of course denies," pointing also to this piece on Microsoft's changing licensing costs.

Comments

The prices really do keep going up.

[Amphigory]

I've been running Windows XP RC2, and must admit I kind of like it. Since my needs these days (as a working pastor-in-training) run more towards word processing than development and web servers, it does what I need pretty well. However, I looked today at the license costs for it and I'm choking a bit. A single-user home *upgrade* is $99. Home full version is $199, and professional full is $299. None of these are designed for server use, but for individual users.

More interestingly, they appear to be actually planning to enforce licensing through an enforced registration (i.e. if you don't register in 14 days, it won't work.) I've often said that few people would put up with Windows if they had to pay for it. The truth of the matter is that many people do not bother with legal licenses for their home software, so don't get too excited when told the product sucks. I wonder if the high costs and no-pirating-allowed will cost Microsoft the market?

The Problem

[zpengo]

Part of the problem in all of this is that changing to a "subscription" service is a brilliant financial decision, and Microsoft isn't going to give up their tactics without a fight.

People have been complaining about Microsoft for the past fifteen years or so. Unfortunately, Microsoft products have been of a reasonably good quality, and people like them, so pirating their software has gone on for just about that long as well.

Piracy means that not only the original owner gets to use it, but also a few of his friends. Microsoft may think that's a bad thing, but all it has done is secure their place as *the* operating system, the office suite, the web server, etc., because so many people use it, even if they're not all paying customers. MS would not have its current market share if it were not for piracy.

With these new tactics to extract money from citizens, the only thing they're going to accomplish is that Microsoft will no longer be in the hands of Joe Sixpack, who will then contemplate Linux, BSD, AtheOS, BeOS, or other operating systems that cost less than a few limbs.

In addition, the percentage of the workforce with Microsoft experience will decline; It's easy enough to learn ASP or whatever when you can install it at home, but not so easy when you can't touch it.

They're shooting themselves in the foot, and that's probably a good thing.

Our experience - $1.2M per year

[Ldir]

We're going through this at my company, and we are not happy. Our least expensive option for 5,000 seats is an Enterprise Agreement - $1.2M per year for three years. The "less expensive" Upgrade Advantage approach costs us more because we're still running Office 97. We have to buy upgrades to Office XP just to qualify for Upgrade Advantage.

Opting out is not a realistic option. While we could remain on Office 97 & NT4/2000 internally forever, our business (as with most businesses) constantly interacts with hundreds of other businesses: partners, clients, and vendors. Unless we can get all of them to stand still on Office, sooner or later, we're going to hit compatibility problems when exchanging documents (and viruses, but that's a different feature). It's a hassle for the business, and it makes us look bad to partners and clients.

Yes, I know that Office XP and Excel XP use file formats that are compatible with Office 97. I don't know that Office 2003 (or whatever it will be called) maintains this compatibility. The way the new MS pricing works, unless you can postpone upgrades for at least four years, it's cheaper to pay up today.

For the same reason, Linux desktops and open source office software are not a realistic option. The business can't afford compatibility problems with third parties. It just isn't worth the risk.

I wonder how expensive MS software has to be, and how onerous their terms have to become, before the MS apologists will acknowledge that MS is, in fact, a monopoly.

The arrogance...

[rnturn]

... of these guys is astounding:

``Bill Landefeld, Microsoft's vice president of worldwide licensing and pricing, defended the changes. "I think customers have choice. They had choice before, and they have choice going forward."''

Does anyone else read this statement and think ``You customers have a choice: it's our way or the highway.''

And moving up (with a bullet) in the ranking of my major pet peeves: Not answering the question and/or responding with seemingly randomly selected sentances as exemplified by:

``"We would certainly want to know more about" any veiled threats, said Landefeld, who said such sales tactics would not be condoned. "If that is happening, what people need to understand is that administering software is very difficult, especially for large, multinational companies."''

I would like to know how the difficulty in managing software licenses in a company of any size has to do with Microsoft's sales channel threatening customers. Guess I'm just funny that way.

Re:Individual vs Enterprise License Agreements

[John Murdoch]

but I've read some articles in the Register and elsewhere that indicate that MS has a pricing policy that makes XP cheaper if it is purchased before a specific cut-off date that is looming rapidly. If you upgrade to XP later, subsequent Agreements will be more expensive.

You are absolutely correct. The drop-dead date for signing up for their Open License program (which is effectively an annual subscription for software) is either October 1 or October 10. And my largest customer, number 2xx on the Fortune 500, is so far content to say, "drop dead." They're not moving.