Licence sweeteners too late for some

Extra benefits offered by Microsoft to Software Assurance licence holders come too late for one company well along the path to switching to Linux.

Extra benefits offered by Microsoft to Software Assurance (SA) licence holders come too late for one company well along the path to switching to Linux.

From September, Microsoft New Zealand customers who have signed up for the controversial Software Assurance scheme will be entitled to a range of new benefits.

The extras, announced by Microsoft last week, include training vouchers, more flexible use policies, access to its TechNet online resources and phone support. They cost no more on top of the licence agreement. The trade-off for customers who do sign up to Software Assurance is an upfront charge and an annual maintenance fee for the right to upgrade for two years. Those who don’t must pay new-product prices for upgrades.

“The sum total of what they are giving you in this goody bag adds considerable business value,” says Yankee Group analyst Laura DiDio.

“It is worth about $US10,000 to a business with between 100 and 200 end users. To a very large organisation this could potentially be worth millions in free stuff.”

But customers such as Auckland University of Technology (AUT) in Auckland aren’t hugely impressed with the extra benefits, saying they mostly duplicate what other enterprise vendors already offer. For others, like Stagecoach/Fullers IT manager Stan Low (pictured), it’s too late: the transport company’s already into a corporate IT plan based around Linux.

“When they first came up with Software Assurance I opposed it and Stagecoach accepted a policy of not buying it.”

Low, who has seen the extras but declined to comment on them, based the decision on cost.

Low said last September that the 200-PC company will run Windows 98 and Office 97 for another four years quite happily, and although its Upgrade Advantage has expired the company is entitled to upgrade to Office 2000.

AUT IT director Calum Macleod doesn’t think the additional features will make a lot of difference to the organisation.

“Some of them we would expect — we expect them from other vendors, so why shouldn’t we get them from Microsoft in the normal course of events? I don’t think it’s going to make Software Assurance any more acceptable.”

AUT’s desktop PCs aren’t affected by Software Assurance, as they use an education licence, but 45 of the institution’s 120 servers run on Microsoft and Software Assurance has pushed more costs up front, Macleod says.

“In the old days you were able to buy upgrades to server products as you needed them, but now you have to buy them when you buy the licence.”

Of the non-Microsoft OS servers at AUT, half run on Linux and half on Novell Netware.

Microsoft executives, from CEO Steve Ballmer down, have admitted Software Assurance’s introduction was handled badly. Microsoft New Zealand managing director Ross Peat says the company “always intended to bring value to the table” regarding Software Assurance, once the foundations of the new licensing regime were laid down.

“We felt the first step was to align our software around the notion of software as a service, not a product, then bring the value proposition forward.”

Peat says “well over half” of the company’s large and medium-sized New Zealand customers have signed up to the scheme, introduced 10 months ago. In Australia the figure is believed to be about 65%.

DiDio says, “clearly, Microsoft is coming around and trying to get a second chance to make a first impression. What they are offering is a bag full of goodies that represent intrinsic value”.

Among the goodies are a home use programme, which will entitle individuals at SA-signed organisations to a free copy of software for home use, but not the same CD they use at work — they’ll need to order another one from Microsoft. Free support is another feature, but it applies only to server products, and phone support during business hours is limited to certain licence types of enterprise versions of software.

A table of Software Assurance benefits can be seen here.

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