One of Microsoft's biggest users, HSBC, has criticised the software vendor's new licensing policy, claiming it forces companies to upgrade too often with few business benefits.

Alan Jebson, worldwide group IT director at HSBC, told Computing the bank will resist moves to subscription-style licensing for its 180,000 PCs.

'It is more cost effective in the long-term for us to re-purchase the software, rather than subscribe to updates that provide little or no direct business benefit, and which we consider unnecessary,' he said.

Microsoft's new Licensing 6 scheme, introduced on 1 August, is priced on the basis that most users will upgrade to new software versions every three years.

Jebson says HSBC will stick with its five-year upgrade cycle based on a demonstrable business need.

'Microsoft's view of the normal replacement cycle did not correspond with our experience. It is true to say each incremental release offers less and less value to a business.'

HSBC is moving from Windows NT to Windows XP. But Jebson says some applications do not add sufficient new functionality to merit an upgrade.

'When I first started using Excel it occupied about 1MB of disk. Today it is between 30-40MB and I use Excel in exactly the same way I have always used it,' he said.

Gordon McKenzie, Microsoft business manager for retail banking says updated software versions add extra features for business users.

'We are always adding functionality to make deployment and management easier and we are actively working with the banks to understand their business. Our customers should buy what they need, not just because it's the latest version.' he said.