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Microsoft's Software Assurance Mistake | |
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| Time: 13:22 EST/18:22 GMT | News Source: eWeek | Posted By: Robert Stein | ||
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What is Microsoft's biggest failure? Some say it's the security crisis that has surrounded the company for the past few years, while others cite Microsoft's slow adoption of Internet technology. Some believe it's the gelding of Longhorn into Shorthorn; a few still remember good ol' Microsoft Bob. | ||
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| #1 By 16302 (64.201.211.161) at 10/22/2004 3:42:38 PM |
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First off, I would not classify Software Assurance as selling software on a subscription basis. It requires that customers pay up front for the entire capital cost of the software PLUS another 50% or so to get the right to upgrade to a future version that may or may not be delivered within the life of the software assurance contract. Here are some of the mistakes that Microsoft has made:
1. They change the licensing with each version, and they do not give the guarantee that the customers of SA can use the new product under the same terms of the existing licensing agreement. This means that customer's don't know what they are getting, so why pay 50% up front for it. There are many examples of how Microsoft has changed the licensing terms of their products and customers ALWAYS have to pay more. Just take a look at the history of internet connection licenses for SQL Server or Active Directory; they both changed in the last product revisions and they both require that customers now pay for multiple licenses where a single license worked before. For example, in Windows 2000, you could purchase an internet connetion license for Active Directory. If you had three servers that served external communities, the license would cover all of them. Now with Windows 2003, you have to pay the equivelent cost times three licenses. Not only that, but there is no more internet connection license, so even if you purchased software assurance on it, it is no longer a product. 2. Microsoft does not deliver timely updates to their products. The only time it makes sense to purchase SA is just before another product launch (ie: purchase SA on SQL Server 2000 now so you can upgrade next summer), but not after the new product is launched (ie: Windows 2003 Server) because it will be at least three or four years in-between versions. If customers have to pay up front, then Microsoft should guarantee at least one version upgrade in the terms of the license agreement. 3. It is a capital cost. If they want to move towards a subscription model, they should lease their software on a monthly/annual basis and not require any upfront capital. I would sign up in a heart-beat under this model. 4. Customers want future flexability. The software assurance plan requires that they purchase the full license now, plus pay half of the next license, on an unknown product with an unknown license. In any other business sense, this would be a very bad decision. Customers want to evaluate the market in the future and consider the merits of upgrading, staying on the old system, and having the flaxibility of switching to a competitor's system. 5. These extras that Microsoft have been trying to add to SA are not providing the benefits for many organizations. There are some organizations that benefit, but most will not. Customers want a cheaper way to license software, not just more ancillary services that are not necessarily needed. 6. The software assurance plan requires an open license. Now here is where it gets unfair. The life of the assurance plan is tied to the term of the open license. So, lets say a customer gets an open license agreement and purchases a number of servers with SA on the first day. Then lets say a year later they need another couple of server licenses. The benefits on the two later server purchases will expire at the end of the open license (in one year), so the customers do not realize the benefits of the plan. 7. It seems as though every aspect of the program is heavily weighted to benefit Microsoft at the expense of a customer. Most other companies try to offer value to a customer and give them things that they want. This software assurance thing really damages the Microsoft brand because it is just simply not fair for customers. To top it all off, they no longer support a seperate upgrade price for their products - they force customers to purchase software assurance, or pay the full price when they upgrade. |
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