Microsoft defends subscription policy


21 Mar 2003

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Microsoft’s Irish management has defended the company against criticism following research that alleges its new subscription-like software licensing model has resulted in 60pc of its customers paying more for the same products.

A survey by Yankee Group and Sunbelt Software of more than 1,000 technology managers worldwide found that 60pc of all businesses that signed up for the Licensing 6 programme have seen increases in the fees they pay Microsoft for its software. The company has been catching flak for the last two years since it announced the controversial plan in the face of stiff customer opposition. The programme went live last August.

Under the terms of the Licensing 6 programme, companies pay for discounted upgrades in advance of receiving the software and eliminated off-the-shelf upgrades that allowed businesses to purchase the software when they wanted.

In a statement issued to siliconrepublic.com, Microsoft said: “Microsoft is committed to enabling its customers to secure the optimum return on investment in Microsoft software. Microsoft does not wish to see customers’ software costs rising as a result of new licensing arrangements. Customers are advised to work with a trusted Microsoft partner to assess the best licensing programme for their particular business requirements.”

Just under a third of companies signing up for the plan saw their Microsoft licensing fees remain the same. Some 22pc of adopters saw their costs increase by between 5 and 20pc, while 16pc saw a 20-30pc increase. Close to 8pc saw a 30-50pc increase and another 7.4pc reported cost increases of more than 50pc. Costs for 6.3pc of respondents doubled.

By John Kennedy