Microsoft criticised over licensing deal

Microsoft has been forced to back down over its Windows licensing agreements in the face of pressure from users and analyst Gartner Group.

Gartner revealed last month that many of its clients were being charged twice as much for licences by Microsoft for buying workstations from a hardware supplier that come with a licensed copy of Windows installed, and then reconfiguring the machine for their own requirements.

The analyst group said Microsoft's sales staff were pressuring users into buying additional licences at a cost of between $117 (£84) and $157 (£112) per desktop - even if they were reconfigured with the same version.

Microsoft said in a statement published on its website last week that, because of customer feedback, it has changed its licensing policies to allow Enterprise and Select licence customers to reconfigure at no additional cost. These licences usually cover organisations with more than 500 desktops.

"This was never specifically a revenue-generating opportunity; it was purely a clarification we sent out to our sales forces," said Neil Laver, Microsoft UK Windows 2000 Professional product manager.

"I don't think we were aware of the extent that re-imaging was taking place, and we have responded by being flexible with our licensing requirements," he added.

Microsoft denies claims by Gartner that it needs to include the changes in the licence agreements to guarantee users protection.

"We don't normally rewrite the contract, but clearly all new agreements will reflect the new terms and conditions," said Laver.

Gartner claims that Microsoft will still be able to exploit millions of small-to-medium enterprises using licences issued under the standard Open agreement, however.

"The people who are going to be most affected are in and around 500 desktops and fewer," warned Alexa Bona, research director at Gartner.