Small firms say no to MS for rent

Microsoft has introduced new licensing to allow application service providers to rent out its software on a monthly basis, but a survey shows New Zealand businesses aren't interested.

Microsoft has introduced new licensing to allow application service providers to rent out its software on a monthly basis, but a survey shows New Zealand businesses aren’t interested.

Microsoft is signing five local ASPs to the programme and plans to have a dozen by the end of the year.

But Unisys is not rushing to rent out Microsoft software after its own market research revealed an overwhelming lack of interest among small and medium-sized businesses.

Unisys' ASP division surveyed 320 New Zealand businesses with between 10 and 100 employees on whether they would use Microsoft Office through an ASP service. The survey had a 61% response rate with 93% of respondents saying no. Those who said yes were asked at what price they would use it: 86% said less than $10 a user a month, 9% said less than $20 a user a month and the rest didn’t know.

“The market is telling us they don’t want it because it’s a commodity product that anyone can use, anyone can load,” says Unisys ASP head Sean McDonald.

“Often you use it out of the office - at home or on the plane. To tell someone to access an Excel spreadsheet or a Word document via the Internet is preposterous.”

McDonald says because Microsoft Office is such a content-rich product it has to be deployed through Citrix MetaFrame, which costs $40 a user a month to license. “To deploy Microsoft Office would cost us more than $100 a user a month. Given that you can buy a copy of Microsoft Office today for $300, I don’t see the viability.”

However, McDonald says if customers do ask for Microsoft products it will provide them.

Esolutions, the ASP formed by Telecom, EDS and Microsoft, is charging its Microsoft users $155 a user a month but brand manager Sue McCarty says weighing ASP pricing against software licence fees is a misleading comparison.

She says the software licence fee for Microsoft Office 2000 is just one element of Office Online’s fee (approximately only $25.83 of that fee, when considering an open licence of $930 depreciated over three years.)

The true value lies in the total package, she says: software accessed on the Internet, data storage, daily file backup, document restoration, virus protection, intrusion detection, network infrastructure and management, administration, support/help desk, software upgrades and remote connectivity.

As one of 12 ASPs in a world pilot, esolutions began offering Office and Exchange in early August and now has five business customers.

In the US Qwest, in which Microsoft is a minority investor, offers Microsoft Exchange as a hosted service for monthly fees of $US15 to $US25 per user.

AppServe, an Auckland ASP formed by systems integrator Computerland and business consultant Graham Clarke, says it would offer Microsoft products as part of a customised suite of products and services and as such can’t break out pricing for individual products.

AppServe had asked Microsoft if it could rent its products to customer Cellphone City but was denied because the programme was still in the pilot phase. Instead Cellphone City has been outsourcing the management of its Microsoft products to AppServe since December. However, AppServe is keen to sign on as a Microsoft ASP. Auckland ASP Greenwood Technology has also applied for the ASP license.

Microsoft products available through the programme and their licensing modes are: Office, Exchange Knowledge Worker, SQL Server, SQL Enterprise, Commerce Server, Windows Server, Internet Acceleration and Security Server. Next year Microsoft will offer an ASP certification programme.

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