To assist those considering the SA programme, Techlaw will cover, in the weeks to come, some of the issues associated with the Microsoft plan. This week we cover what is negotiable, what you should attempt to negotiate and how to document commitments that are made.
First, what is negotiable? The terms of the MS Open Licence contract are not. The contract is what is referred to in the US as an adhesion contract. It is in standard form and is offered on the basis that if you buy the programme you "adhere" to the standard terms. Simply put, it is a take-it-or-leave-it contract with wide exception clauses as to what has to be delivered (basically whatever Microsoft deigns to give you) and exclusion of all liability.
Having said that, you are not completely without rights.
You should be able to negotiate price because if you can’t there must be price fixing. So, good luck there. You should also be able to rely on representations made by Microsoft and its dealers. It is very important here to have a complete document trail. There were a number of important representations in Microsoft’s brochures and the online audio presentation that appear to be contradicted in the strict wording of the licence. If you are relying on those statements, keep the brochures and record the audio presentation.
The most important representations are those made in answer to your questions. That leads to the questions that should be asked. The complex licensing scheme makes it difficult to know where to start, so I offer some questions you might want to consider asking your Microsoft dealer by email.
1. Do you provide quotes on MS Open licences? (to establish price competition). If so what information do you require to quote to us?
2. I have been told that I might need the services of a licensing consultant because of the complexity (this is often recommended, though the licensing consultants' often close association with Microsoft makes companies nervous of their independence). Do you prefer this approach or is working out our requirements as a customer part of your service? If you do require a licensing consultant, do you pay for their services or provide a discount for the cost we bear in obtaining their services?
3. If we cannot afford to "get current and stay current" by the July 31 deadline, can you provide credit terms or accept an order for delivery after that date with payment delayed until delivery?
4. If we take Software Assurance, can you assure us:
a. That we will get bug fixes and the service levels we can expect for our money?
b. That the composition of the bundles will be frozen during the period of the contract (that is, so that we can get updates and bug fixes to all elements rather than one being dropped, as happened with PhotoDraw in the Office bundle)?
c. That we will be able to renew the contract at the end of the term and that we will have a reminder and a period of grace for renewal and payment, so that we do not risk losing our upgrade rights on a technicality?
5. We have MS BackOffice and are worried about MS SQL being dropped from the bundle. Does SA guarantee that no further components will dropped? If we stay on our current version because of cost and accept that we have to rebuy the product, will we, when we are ready to rebuy, have to rebuy Backoffice and also buy a new MS SQL licence?
6. On server products, given the cost of rebuying full server licences with CALs (client access licences) on today’s prices, we estimate that we will need to stay on our current platform for four or more years. As this option is promoted by Microsoft, can you tell us if there is any commitment to keep pricing frozen so that we can plan on that cost as represented in four years' time being the same as today? If so is there any way we can have a guarantee of that?
7. We are worried about not being able to choose which parts to upgrade because of potential incompatibility. For example, will a future Outlook Client be backwardly compatible with, say, Exchange 2000? If not, and we need more CALs, will we be able to buy Outlook 2000 CALs, in, say, 2006?
8. Finally, if we cannot afford to upgrade our desktops and we accept the OEM “upgrade as you go” model, we would like to ensure that we are only supporting one desktop platform, to keep our desktops on Windows 98. If we buy a desktop with bundled Win XP, can we use that licence to backgrade to Win 98 using our existing disks? If not, how do we create a maintainable environment and avoid proliferation of operating system versions? If the answer is that that is not possible, are you saying that the upgrade by re-buying does not work if you want to avoid proliferation and that we have no option but to buy Software Assurance?
9. If you are not permitted to answer any of the above questions on instructions from Microsoft, please advise me.
If you receive any replies from distributors that you think are of interest to the general public, please feel free to email them to me.
Craig Horrocks is a partner in Clendon Feeney’s technology law team.