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Microsoft Steeply Raising Enterprise Licensing Fees
hypnosec writes "Microsoft is trying to make up for below expected earnings following Windows 8's and Surface RT's lack luster adoption rates by increasing the prices of its products between 8 and 400 per cent. Trying to make more out of its enterprise customers who are tied under its Software Assurance payment model, Microsoft has increased user CALs pricing 15 per cent; SharePoint 2013 pricing by 38 per cent; Lync Server 2013 pricing by 400 per cent; and Project 2013 Server CAL by 21 per cent."
Microsoft method: Milk them for every cent.
Linux method: Free is free. Nobody can hold a gun to your head under the GPL.
corporations are more responsive than ever to finding and deploying alternatives to Microsoft software. let's hope this spurs more open source development.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
For Ballmer to keep his job, Microsoft needs to make a profit. Last quarter it made a loss, Ballmers excuse was a one-time write off. However Windows 8 is flopping, Surface is failing, and he needs to show a profit.
So he's massively ramping up the prices for the locked in customers, in the long term, they'll move away from Microsoft products, but in the short and medium term, they'll have to bend over and take it.
After Ballmer has run the company for 10 years and it's been in decline, you have to realize that astroturfers cannot save him, he needs to go. No more excuses.
I see: so if demand goes down, price goes up?
Good luck with that ...
It does a number of things, some of them vaguely useful, but none as well as other stand-alone tools, it's awkward as hell, and people hate using it.
Raise the price on it and even some of the most MS-centric IT shops will go "Fine, we'll just set up an internal Apache server and Confluence instead."
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
I'm a Microsoft guy through and through, when it comes to the enterprise. These licensing costs are just getting really difficult to justify. I know there's some open source replacement available, but it's not all very coherently tied together the way MS stuff is. I'd love to be able to move away though.
in the 80s various flavors of UNIX locked their customers' data in expensive licensing deals.
then one day, windows NT came out and showed a cheaper way. around the same time Linux also came but only a few saw Windows as just another trap.
Now we have a prophecy realized.
Obama's legacy: (N)othing (S)ecure (A)nywhere and (T)error (S)imulation (A)dministration
It wasn't long ago I saw on OSNews that Windows 8 was selling great; now supposedly it's not. To be honest, I had a hard time believing that it was pushing new PCs faster than they would go to begin with, despite the artificial sales boost in the form of dirt-cheap upgrade discounts. So really, given the fact that Microsoft basically has all the OEMs in their pockets and a "Windows sale" is really just a "new PC sale," how the hell can any such claims of "Windows sales" be made anyway? Isn't that an impossible number to pin down, given that most new PC buyers will be stuck with Windows 8 due to Microsoft pushing it and all the OEMs pre-loading it by default as a result?
Microsoft has increased user CALs pricing 15 per cent; SharePoint 2013 pricing by 38 per cent; Lync Server 2013 pricing by 400 per cent; and Project 2013 Server CAL by 21 per cent."
Allow me to translate, for Australian license partners,
Microsoft has increased user CALs pricing 45 per cent; SharePoint 2013 pricing by 114 per cent; Lync Server 2013 pricing by 1200 per cent; and Project 2013 Server CAL by 63 per cent."
Calling someone a "hater" only means you can not rationally rebut their argument.
These idiots who didn't see it coming from miles away deserve to be squeezed by these assholes.
When all you have is a hammer, every problem starts to look like a thumb.
They raise prices and drive more business away. Does Ballmer think he's running a phone company or something?
"Tired of holding sway over a group of clients who have remained steadfast in their use of Microsoft products, the tech giant is doing all it can to give them reason to leave the fold by incentivizing alternatives and souring relations."
I mean, seriously, Microsoft? In the face of a less-than-expected level of consumer response to your recent flagship products, you decide to punish your remaining, loyal client base by raising their prices at a time when viable (and oftentimes cheaper) alternatives are becoming available and are being adopted in greater and greater numbers? This makes no sense.
When will Ballmer be kicked out already? Microsoft has smart people working there. If someone actually managed to clean house and eliminate all of the ridiculous middle management they have, I wouldn't be surprised if they could start putting out some decent stuff again. And, I'm saying that as someone who lumps himself in with Apple fanboys. I want to see Microsoft strong again and making products that people actually consider instead of scornfully rejecting, but I want to see them earn that spot through innovation and good design.
As a small business owner, I was looking to implement SharePoint Server. I've downloaded the evaluation, getting the hardware together (have the server, need the drives/more RAM). Now I see that this already bloated {overpriced} software is going to go up by 38%. I don't know where I'm going to turn to, but it was on the outside edge of what I could afford. Now, to research the market for other options. Viable suggestions would be appreciated. Is it time to add a section to Slash that would have replacement recommendations options or for overpriced [MS] software?
Both have only been out for about a month. It's too early to really tell how either of them are doing. It also takes time to make decisions about pricing.
This is an Indian news site. You have to ask yourself how much is due to changes in the exchange rate? I think at least some of the increases could be attributed to that.
They moved back because the re-training costs were so high. These large price increases are likely to have them revisit those decisions.
It has been one of my more painful experiences that the market does not like to be cornered -> any time you think "And that's why they will have to go through me, and I will soak them for all they're worth!" you wake up with a live badger in your trousers. If MS is thinking "they have nowhere to run!" then the market is thinking "2 for 1 sale! Live badgers and wolverines! Get 'em while you can!"
And people wonder why I have a slight case of the nerves.
I am John Hurt.
Indeed. Short term, their customers will probably pay; long term, they'll quietly move away.
The people at MS will probably applaud the revenue increase, thinking to themselves "Why didn't we do this sooner?"
In a few years, they will be thinking instead "Ah, that's why we shouldn't have done that."
Ballmer is really dropping the ball here. All he needs to do now is announce that MS is getting out of the software business to pursue next year's Big Thing (the micro-tablet market), and MS will officially be done. It will rank up there with HP's announcement that they were considering selling off their hardware division, and will have business majors everywhere groan at the memory of it.
I am John Hurt.
If that was the case, he'd add an extra fee per document and per megabyte of data stored as well.
I was promised a flying car. Where is my flying car?
i'd be the last to defend ballmer, but that quarterly (4/12 to 6/12) "loss" was due to writing down the $6+ billion acquisition of aquantive.... which was stupidly bought (at a grossly overvalued price) while uncle bill was still in charge.
without the writedown on the books, they would have made MORE than during the same quarter the year prior.
First I have to comment on the huge number of at least acceptable comments above that were modded down to 0. Very odd, but it seems that the pro MS down modders ran out of karma points after the first few dozen anti MS posts.
.net) was a great way to make quick windows applications and for a while it got better and better. Then Visual Studio made Windows C++ programming way easier than that Borland C++ ever did (OWL was crap). These were products made to make my life better and they did. The impression I had of MS in the past was some hot shit programmers crowded around chalkboards, terminals, and doing the cool. Now my impression is that the programers are all third rate and completely beaten down by layer upon layer upon layer of useless middle and sort of upper middle managers. Now the only goal at MS seems to get a little revenue goose to impress their shareholders for 5 minutes. I doubt they will be as impressed in 5 years.
I have said it before: MS is doing nothing to bring me back. I like MySQL better than SQL, Apache better than IIS, CentOS command line better than Server, Mac OS X better than any windows. I haven't used Visual Studio in long enough that I can't compare it to XCode. On my Mac I can run all my critical commercial software plus it mostly reacts like Linux so another strike against MS. I use my xbox for gaming and it smells like Linux might become a force in gaming (to be seen). I think that I am a pretty typical geek in that I have an xbox as my only MS product. Now most corporate types are on Windows but that is often because they have WidgetManager 2000 running on all their XP systems. I have even seen corporations that have to play all kinds of games to buy new machines and get XP onto them legally so that their old crap keeps working. Few of these companies have managed to make the Linux desktop transition for the first reason of legacy software but for the second reason of MS Office. I don't personally use it but in a corporate environment OpenOffice just doesn't cut it. But the moment some group gets together and ports the OpenOffice code to C++ awesomeness will happen. My favorite word program for Mac is Bean. It is C++ and rocket fast. It doesn't do much but that is a feature.
So looking at Microsoft as a tech professional I would never in a zillion years recommend that a new corporate system be based in the MS world and I suspect that there is a horde of non MS people making the same consistent recommendations to various companies. Many of these companies don't change because of inertia but one of the things that slows down an object moving by inertia is friction and this price increase will add to the MS friction. I doubt that there will be a huge wave of people vomiting out MS from their company due to this smallish increase. What there will be is a slight increase in the trend of people using non MS products. In the corporate world it is usually the negative trends that get you. People didn't stop using film overnight but Kodak couldn't get ahead of the trend and Kodak basically invented the digital point and shoot.
I don't hate MS but it gives me zero reason to love it yet I remember the days when I did. Visual Basic (before
Microsoft are fucking idiots. Every enterprise customer they have already wants to get away from them, but the cost of migration is just too steep. What they did here was change that... even if the new rates still keep the cost bellow some threshold that would make it easier to migrate to something else, what they've really done is say to all their customers "We will price gouge you in the middle of a recession" and you can bet every IS/IT department in the country is going to be having meetings regarding just how quickly it'll really take to get out from under the chains of .NET
The android desktop OS is coming... we all know it. It'll be free and Google will have hordes of experts ready to fly out to your site and help you migrate... then what Microsoft?
Move CIFS shares to my netapp, move email back to a nix box, encourage users to jump to tablets, macs, or nix workstations (all of which are easier to support than Windows).
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
As massive licence buyers are heavily negotiating the official prices, we won't get a Linux landslide... do not expect those prices to be applied to governments or big companies.
Stupidity is the root of all evil.
>> Cities are moving back to Microsoft products after failed Linux experiments
FUD.
Bigger cities are moving faster to OO/LO and Linux.
FACT.
http://media.ccc.de/browse/conferences/eh2010/EH2010-3784-de-limux.html
aaaaaaa
Enterprise is MS cash cow and cows are milked and cows that protest to loudly are killed for fun, meat and an example to other cows.
The farmer does not care what the cow thinks of him, the opinion of cattle is worthless. Their enterprise customer have shown over decades to be completely incapable of independent thought so why should they change now? Oh, this price increase is the straw that broke the camels back? Breaking a back only works in animals that have a back bone. Cattle does not. The reason you can overwork donkeys and cows and dogs is because they are dumb animals that are easily domesticated. A smart animal would resist long before you overload it. Enterprise customers have not resisted. In fact, they resist every which way they can to any attempt to set themselves free or at least not be under complete and total control of their Microsoft master. Just go ahead, ask for a Linux desktop at a large Enterprise business like say Shell just to come up with a name. Can't be done. These slaves don't just accept the whip, they buy it for their master, oil it so it gives optimal whipping power and turn in anyone who tries to set them free or introduce laws trying to limit the amount of whipping that can be done.
And you think these Enterprise customers can be alienated? Same with the OEM's. They could have EASILY done a Linux machine by now. They didn't. And nothing MS will do will change that. They are OEM's, not Apple or a (the old) Nokia, they sell cheap clones with a generic OS and make their money from crapware. They don't have the willpower, brains, imagination to do anything else. Oh they might protest a bit, just like a cow might kick and kill a farmer but just as the cow will then just stand there and wait to be killed, the OEM's will throw a hissy fit and then assume the position again to be shafted by their beloved master.
Ballmer is a lot of things but one thing he really is, is a good sales manager. He knows just how much to squeeze the market for. And don't worry, any Enterprise that balks about a 400% price increase will get a special discount, just for them of say a 10% discount, now ain't you a special little cow! Any MS rep gives their big customers massive discounts. Just all big Enterprises give their loyal customers a big discount and NONE of them ever figure out that if THEY only give discounts that are less then the previous price increase, someone else might do the same to them.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
The company I work for tried the "independent thought" version for a long time. Resisting using Microsoft tools (apart from a minimal AD and XP on the PCs).
Until it was obvious that the collaboration environment was simply not there and hurting our business in a really bad way.
Then they went out and researched the offerings available (yes, they did real research).
Guess what? In the collaboration environment, only Microsoft could deliver. The price tag was huge (by my standards anyway). The implementation was not without problems, but in the end we got there. The full package with Exchange, Lync, SharePoint. Now it works like a dream.
The reason management went with it? It gives us value for the money. Return on investment. And that is what management want. Whether it is IT or any other part of the business. Return on investment.
It was a superb alternative to getting any work done. I'm sure that many of the people who chose to fight those battles saw some upside from their foolish devotion further down the road. But it was a long road. WinNT wasn't even much of a lock-in all by itself. But so many corporations just couldn't wait (this was the dotcom boom, remember?) to encapsulate mission critical business-logic in VB for IE4. Fifteen years later, their successors are wailing "will this rogering ever stop?" Convenience, self-determination, market relevance: pick any two. Lesson learned.
What Microsoft is presently doing is established practice in the enterprise life cycle. When lock-in is your cash cow, and competitors are making your technology irrelevant, take all you can get. Few corporations with a cash cow as large as Microsoft's are found at the innovative fore-front until the cash cow is slaughtered.
If they must kill the beast to re-invent themselves, it makes good sense to first fill their pockets. The only real question here is whether they should pay this windfall out to their existing shareholders, or reinvest these funds to stick around at the top of the heap.
Disencumbered of the cash cow, does Microsoft still have what it takes to remain technologically relevant?
Microsoft has built a towering edifice of customer lock-in, terrible to behold. Eventually, in the fullness of time, the edifice will fall. We may be seeing the start of that process.
Comment removed based on user account deletion
Hah, poor sap never heard of Zimbra and KnowledgeTree. Ah well, good luck with your cripple Sharepoint, you deserve it.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
We saw this coming and bought 100% of our replacement servers and OSes and CALs and Exchange and Exchange CALs on Nov 30th. We're migrating from 4 older servers down to 2 so this just made up speed up and buy em at the last second instead of waiting 2 more weeks. Take that, Microsoft.
Also, others' claims above aren't far off about companies actually switching. We NEED certain MS-only enterprise apps but at $453 a piece for Office Pro Plus OLP, guess who's testing Libre Office Base with our Access databases this week.