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Microsoft Customers Get No Bang for Buck
sammy baby writes "Software missing its ship date is commonplace enough that it's usually only mentioned for yuks. However, subscribers to Microsoft's Software Assurance program are discovering that it can have some very real repercussions. According to NetworkWorld, many licencees are discovering that due to slipping release dates, many thousands of dollars spent on these contracts have brought them zero return."
At what point did these customers forget they are dealing with a software company? Missed dates, slippage, heck, I work as a programmer and there's often good reasons (You can have it now unfinished, untested or with bugs OR you can wait for it to be finished, passed Q/A and tested), granted there are numerous examples of Microsoft using the customer for testing after rollout ("Oh, that bug will be fixed in the next service pack"), but again I don't think they're unique. They're just singled out because Microsoft is a favorite whipping boy. Imagine the losses that may be incurred by (more) flawed code being released on schedule.
A feeling of having made the same mistake before: Deja Foobar
... remember it's not only MS who produce vapourware. Pre-orders for, say, Duke Nukem Forever have gone the same way - although I dare say most retailers offering a pre-order will have issued refunds.
Sadly, in business, slippage does occur and contracts do expire. It's not preferred, but it occurs more than most people would like.
The long and short is, IMHO this is only noteworthy at this time because of the sheer scale in terms of both cash value and number of "victims".
"It is dark. You are likely to be eaten by a grue." -- Zork
On the other hand, there's one born every minute. Usually that's plenty.
===== Murphy's Law is recursive. =====
I'm pretty sure this exact thing is why almost everyone was against the new licensing when it was announced.
Can't come as a suprise.
Belief is the currency of delusion.
A lot of Microsoft revenue has always come from very sketchy licensing policies. I don't see why this new twist should surprise anybody. It's just more typical behavior from monopoly.
Still doesn't make customers very happy. Mind you who on earth would buy a subscription to "We might send you some magazines this year, but maybe not"...
All of the software companies have similar problems. The big difference is that Microsoft virtually forces you to buy into their program if your company is large at all.
Because of their monopoly, you have to upgrade eventually. If you don't buy into SA, the individual upgrades later will cost you much, much more. So you end up having to gamble and pick between the two choices.
I am unfortantly responcible for our Microsoft CRM system, which was released a little over a year ago. So waiting for version 1.2 to come was frustrating, and having them push back the release date didn't help. It was finally made official that it would be released in the beginning of December. Dandy.
So being a good IT slave, I plan the upgrade ritual around my schedule and priorities.
Long story short, it didn't arrive until mid January. Needless to say I constantly received inquires about when the system would be upgraded, as parts of the system were not working right and MS was still working with me to fix it and they felt that the upgrade would be the solution....
*sigh*
It's impossible to tell in advance what these contracts are going to be worth. In short, these people paid for any updates to Windows in 2004 or 2005 on the assumption that there would be one. Microsoft never promised one, but they hinted that Longhorn should be ready by then, and it's been Microsoft's habit to release a new OS every two or three years.
Well, sorry, no new release. Nobody promised one, they just assumed like fools that there'd be one. Ton of money wasted. Oops.
Thing is, how can Microsoft ever sell these subscriptions again to companies that paid and got nothing?
The CIO of a company should know better than to get a maintenance contract just so he can upgrade based on a roadmap that may or may not materialize. If you want the maintenance only so you can upgrade, wait until the upgrade is out and THEN sign a maintenance contract.
The CIO needs to make it clear in summary to the CEO and CFO that these are the expected benefits, these are the assumptions I'm making and these are the risks. In my opinion he didn't do his job and now he's blaming Microsoft for failing to pedict the future, and he's making a fool of himself in the process.
If you're going to blame Microsoft, blame them for something they've done wrong. Don't try to penalize them for telling you what their plans are (a good practice in my opinion), or for your own stupidity. It makes you look like a whinning twit when you do have a legitimate complaint.
These posts express my own personal views, not those of my employer
So, in short, no ownership, no migration path (except if Microsoft feels like it), no lease write offs, and you get to pay rent.
Do landlords generally improve an apartment after you move in? Not usually. They figure, you're in so why bother. These companies better get used to the leaky toilet.
At least if you're renting you only have to move apartments. The first time a company wants to discontinue "software assurance" they're going to realize that moving to a new apartment is a whole lot easier than moving every single pc and server to a different OS or to finance purchasing of all software everywhere in the company.
In short it's a choice that only an MBA could love. (Want to put your company out of business? Create an expense where none existed before!)
The baby's fine -- please stop sending business cards.
The chart lists $1.8 billion in 2003, $1.1 billion for 2004 and $0 for 2005. Why even list 2005? It hasn't happened yet. All this chart does by having 2005 on there is mislead people into thinking that 2005 was fruitless. What a base way to "support" what you say in your article. When I got to that part, I dismissed the article even though I agreee that MS is in for trouble with the upgrade dilema. Bad journalism strikes again.
US Democracy:The best person for the job (among These pre-selected choices...)
Microsoft seems to assume that their upgrades will always meet these requirements.
No, they're quite realistically acting on the observation that eventually you'll adjust your requirements to fit their product. For instance, NT4.0 is going to be replaced because one of those "business requirements" is "continuing support."
I've watched as W2K replaced NT4.0 and WinXP replaced W2K. At each step, the IT staff reported all sorts of problems with the new version and no material benefits. In reponse, their management ordered them to solve the problems so that the new flavor could be deployed.
That's real life on the front lines, theory notwithstanding.
Lacking <sarcasm> tags,
However, subscribers to Microsoft's Software Assurance program are discovering that it can have some very real repercussions. According to NetworkWorld, many licencees are discovering that due to slipping release dates, many thousands of dollars spent on these contracts have brought them zero return.
That's exactly what I thought when I saw the story about XP Reloaded. Even wrote a little tidbit on my website about it. This is why I think they're doing an XP Reloaded release. I guess it's going to be too little too late?
AirSpeak - http://itunes.com/apps/AirSpeak
I think the ultimate product for stupid people will be pre-paid health insurance (coming soon to an HR department near you I'm sure).
Once you've paid for such a plan, it's in the provider's interest for you to die as quickly and efficiently as possible so that they get your money but don't have to provide any services in return.
The Microsoft pre-paid license program is just one step below this.
On the other hand, the typical business customer might actually like a way to pay for *not* having software updates, since constantly having to upgrade to the latest version is a pain in the neck, along with having to deal with the feature bloat that is required to otherwise motivate people to upgrade.
This is the business that RedHat has gotten into where in exchange for money they guarantee that the software you're running today will remain supported for a much longer period and you won't be forced to upgrade before you want to, and it's clearly the direction Microsoft is tring to move as they start running out of compelling feature-based reasons to upgrade from verison N to N+1.
So if you don't want things to change, by all means pay in advance, but if you're looking forward to new features, wait until the product actually ships before handing over your money.
G.
This of course causes all of the people who fell off of maintenance to have to buy the new version at full retail price, rather than as an upgrade.
More money for microsofts pocket.
I have mod points and I am not afraid to use them
From two years (2000 through 2001) Microsoft provided essentially nothing in the way of new programming tools (or heaven forbid, bug fixes) to it's $2,000/seat MSDN customers. .NET so their net profit remained $1800/year.
.NET. (To be fair, it comes with a free copy of Office 2003.)
After two years of 90% profit margins ($200 worth of duplicate DVD/CDs + shipping), in 2002, they raised the price by about $1000 for 2002's
So, except for the few MSDN customers who were smart/quick enough to figure out what Microsoft was up to, they ended up paying $7000 + $2500/yr for
I wish this caused people to stop paying MS for upgrades ahead of time. So that upgrades would not be a given for a percentage of the user base. So that the remaining percentage of the user base did not feel compelled to upgrade as well, in order to keep file_features compatibility with upgraded base. So that people might have a chance to look at what new comes out and ask themselves: is this even worth upgrading ?
Then maybe increasingly bloated software does not keep us upgrading and throwing away computers so much. Then OS developers will have a fixed target to catch up. Then MS will no longer be this "bigger-than-life" company. Then developers may dream of contributing to the world, instead of only to a profit making machine's bottomline.
Patents expire. Good things reach the Public Domain. Combustion engines and electric lamps, penicilin and frozen dinners get produced by lots of companies. Why should companies such as MS, Oracle, Siebel, etc. expect to have a perpetual hold of a specific market through an infinite number of releases ? Why should any institution other than governments charge taxes ?
Quem a paca cara compra, paca cara pagará.
Microsoft wants a fixed revenue-stream for the minimum of possible work.
The customers want the exact opposite.
Of course, unlike every other business, in the Windows business, Microsoft is always right.
Maybe somebody should go and tell those poor MS-customers that.
Digital's OS-8 software for the PDP-8 was sold by... if I recall correctly the term was "software maintenance contract." For something like $500/year you got "every" release, which had always been annual... until the year when there was no release. There were some fairly harsh questions at DECUS that year.
Of course, it wasn't as bad as the Y1978 bug. OS-8 stored the date in a single 12-bit word, with three bits for the year... epoch 1970. By 1975 or 1976 people were starting to get a little nervous. The PDP-11 was hot by then and the DEC line was that nobody would be using OS-8 by the time the date field ran out. In fact, the product manager said to a roomful of DECUS attendees that he would "personally" fix the date if OS-8 was still in use in 1978. Of course... it was. And, of course... the manager had moved on to other things at Digital and wasn't around to be held accountable. The date field actually did run out. Digital fixed it by shoehorning in a two-bit extension. But the fix was late, sometime after mid-1979 if I recall recorrectly.
"How to Do Nothing," kids activities, back in print!
Thats less than $10 per month. Per computer...
If your company has 20 licences, it may not be that bad (around 180$ per month) but at 115 employes, it's around 1000$/month for nothing yet
Now think about companies like IBM who has countless employes and paid a lot of money... for not much more than the status quo....
That is what the article is about... That is the real problem...
Windows may be a worthy OS, but the ROI is getting samller for thoses who took the wrong licencing...
I live in Soviet Canuckistan you insensitive clod!
Just a bump in the road on the way to "pay for service packs".
Don't worry, it won't be patented -- I guess Apple's got prior art on that one.
We're killing the support contract of our company with IBM, and spending the money on another identical server instead. Shit happens, we swap the new with the broke server, surely much faster than waiting for their next-day service.
Same with Microsoft. We were paying support for copies of Windows 2000 server, when I realized we've never placed one call to Microsoft. Things go wrong, we format and reinstall Windows; much faster than arguing with a MS technician isnt it?
So just purchasing duplicated hardware and software gets the job done better and cheaper in most cases, except say for ERP systems in which case a bug will have to be fixed and the system cant be just reinstalled for a fix.
I know support contracts are different from software subscription licenses but thought I'd mention it here for brevity. Now on that topic, I wouldnt quite understand why anyone would need subscription licenses from Microsoft anyway. Its 2004 and we still insist on running Windows2000SP4 instead of XP or 2003. We'll wait till 2005 and SP3 before considering 2003. IT departments crave stability in their servers, so going cutting edge with Micrsoft is like shooting yourself in the foot. I wouldnt even go cutting edge on Redhat if the server hosts important stuff.
So ladies and gentlemen of IT, please stop the frenzy of latest, more, bigger, faster, cutting-edge and focus more on better, smarter. We're all in the business of making money.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
Microsoft seems to assume that their upgrades will always meet these requirements.
Microsoft assumes that you'll purchase a site-license OS upgrade sooner or later. Are they wrong? Again, what are you going to say: a) we're deploying Linux! And, going to retrain 10,000 users! And IT! And going to re-develop our crufty, no-source, in-house, business critical apps! b) Go with OS X! As above, but now, we also have to buy 10,000 iMacs! c) Stay on Win2000 forever--as long as you define forever only as long as you offer security support, and the apps that we need will still run on it; which is more like 5 years at the most.
Basically, Microsoft has you by the balls. The sooner you realize you're their bitch, their money factory, that you (and your company) is really just working for them, the better. Frankly, you're lucky that Microsoft doesn't charge more for their upgrades because, really, they could charge whatever the fuck they wanted, and what are you going to do about it? What are you gonna do when Microsoft releases Longhorn, and, to pay for 5 years of development, they charge $500/user? Your options are listed above. Basically, you can either a) suck it up, and stop crying, and realize that you're working for Microsoft, not the other way around, or b) switch to another platform right now, today, and suck on the costs of migration. Because every day you wait is another day that you'll have worked for Microsoft, and simply put off the inevitable, without coming any closer to avoiding it. When your corner office complains about the cost, you can remind them that they and their ilk are the ones that voted Ashcroft "Slap on the wrist" into office, and this is the thanks that they get.
Why this comes as a surprise to anyone is beyond me--why do you think use of monopoly power to extend into other markets is illegal in the first place? Do you think it's because some bleeding liberal hippies got a bill passed once, or maybe actually because some dead white economists realized the real, profound, and lasting damage a monopoly could do to our economic system?
If this sounds like a whiny troll, well, it is. But every non-Windows based IT person saw this coming (all three of them), and it's why the monopoly trial was so important. That Microsoft beat the rap, and got so many to leap to their defense, is going to be rewarded. In spades.
--
$tar -xvf
Software is sadly a hugely complex product.
No it isn't.
Windows may be, but software par se isn't.
The unix way (which Gnome and KDE and probably the kernel (200+syscalls!) are losing sight of) is small components with tightly defined operating parameters.
Awk hasn't changed much in the 30 years or so it has been around.
Same for sed, same for grep and a host of "still used every day" tools.
Badly designed bloatware with featuritis is hugely complexa nd complexity is a vector for failure.
Well designed software is hugely simple.
Plan9 (30 syscalls) can stil run *binaries* compiled in 1994.
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
This is precisely why I advised our COO that we not buy any subscription program when we upgraded to WinXP and Windows Server 2003. Microsoft allowed nearly three years to elapse between Win2k and XP/2K3, and the two year interval for subscription pricing just seemed too short. I gambled that Microsoft wouldn't make a major release in the next two years, and it appears it was a good gamble.
I had a long talk with one of the enterprise account reps at CDW, and I asked him just how many of his customers had actually bought into subscription. "Less than 15%," he said. Seems I wasn't the only one with this idea. When (if) we do upgrade to Microsoft's latest and greatest, we'll have to pay full price, but that should be less than the cost of two subscription terms. I'm also betting that Linux pricing pressure will force Microsoft's next product offering to be substantially cheaper than their current lineup.
In the end they will lay their freedom at our feet and say to us, Make us your slaves, but feed us. - Fyodor Dostoyevsky
used every day, yes. but not by the users who gave Windows a 97% market share.
* ponder *
What do you really know about Software Assurance. In no way is it a "subscription" model. It's upgrade insurance.
You buy a full license to an MS product. If you want to leave it at that, then do so. It's yours forever. If you want to pony up a few extra $$$ you can get automatic upgrades as they become available.
Get some facts together before you declare MS a subscription warehouse.
I'm not really in the software support realm, I support network equipment. So I'm trying to compare this to Cisco SmartNet(tm) and it makes me ask this question:
If I have support for a device (let's say it's 7x24xhr onsite replacement, which isn't real cheap) and the device does NOT fail then have I paid something for nothing? I've still had access to the TAC all this time and all the other things that come with support.
Now I know software doesn't physically break in such a way that you need a new identical replacement from the vendor, but to me this seems similar. It was possible that Microsoft was going to come out with an upgrade during this time, so you buy the contract. You also get (according to the article) access to support services.
On the one hand I know that most folks bought this for upgrade protection, but on the other hand it seems to me that support is insurance, not a gamble that you'll get something out of it. If I'm wrong please correct me.
"Where quality is like a dead stinking rat - you just can't miss it."
I wonder if there is any correlation between Zero Return on Investment (ZROI), an innovative new marketing strategy by Microsoft, and the undisputed fact (according to Microsoft advertisements) that said ZROI is, in fact, less expensive, in terms of Total Cost of Ownership (er, Licenseship), than sofware from that competing multinational multiconglomerate semi-government quasi-empire organization that makes that GNU:\>Linux thing, or whatever it's called.
On the other hand, there probably isn't any correlation. It's just a coincidence that Microsoft is so incredibly innovative.
My great grandmother, who is definitely not the origin of this passage, used to say "If you dance with the Devil, you are going to get burned."
Microsoft's move here was very valuable. Imagine all the bugs and broken software avoided simply by not releasing any software. Fantastic! No problems from upgrading! When was the last time you did a MS upgrade and had ZERO problems?!
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
Some people I know who hate learning curves (and I'm one of them) will run the same piece of software for years and years.
They beat it to pieces and wring every last penny of value out of the thing because it doesn't wear out for them. The more they use it, the lower their per-use cost becomes. Small businesses are running everyday applications on DOS.
If your software is "good enough" and can be run forever, then why would you spend good money to buy something different? Is it really necessary and going to provide increased ROI?
"Provided by the management for your protection."