Firms reject Microsoft licence plan

Many IT managers say they will not sign up to Microsoft's controversial Software Assurance or Upgrade Advantage schemes because they calculate it will be cheaper to buy Microsoft software piecemeal when they require it. Many others are seeking alternatives such as Linux, Samba, OpenOffice or Sun's StarOffice 6.0, released this week.

Only two months remain before Microsoft applies its 6.0 licensing terms, which will make upgrading more costly for firms outside the schemes. But a straw poll of IT Week readers last week showed that many IT managers are ignoring the 31 July deadline.

Analysts Gartner and Giga recently found that two-thirds of Microsoft's largest customers have not signed up. One third of business customers surveyed do not intend to do so, and another third are undecided.

Under the Software Assurance scheme firms pay an annual subscription to receive upgrades automatically. Non-subscribers must pay for full licences for upgrades. Microsoft expects 45 percent of its Windows revenue to come from the schemes by July.

Firms already running Windows 2000 or XP can join the Software Assurance scheme. Others can join the Upgrade Advantage scheme until 31 July and move to 2000 and XP at discounted rates.

"Microsoft is not saying users have to upgrade, but that they need to look at their options," said a spokeswoman.

However, the options many users are looking at include alternatives to Microsoft. "I do not intend to sign up," said an IT manager at a UK software company. "I think Microsoft has shot itself in the foot. People will seriously consider a move to other vendors. Firms will not want to spend money in advance of a possibility of a future upgrade - it is essentially insurance."

Some Microsoft customers may carry on using old software, and upgrade every few years. "On paper it seems that if Microsoft brings out a new product every year, then yes, it would be cheaper to join the scheme, but if you only upgrade once every three to four years, then no. I'm hoping Microsoft will back down," said one IT Week reader.

Kevin Fletcher, finance and systems manager at manufacturing firm William King, said, "We have not signed up. We are actively seeking alternatives to Microsoft."

Michael Doyle of charity Co-operation Ireland said, "We have not signed up and are evaluating OpenOffice."

No IT Week readers contacted said that they would sign up.

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