Perspective: Making customers miserable the Microsoft way

As if the torrents of Windows-related security flaws were not enough, Microsoft has found another way to leave customers with a foul taste in their mouth and an empty feeling in their pocket.

The problem this time centers on Microsoft's Software Assurance program, a for-purchase piece of Windows Licensing 6.0 that the company says offers users "automatic access to new technology and provides productivity benefits, support, tools and training to help deploy and use software efficiently."

Microsoft says this will simplify the purchasing process for customers, many of whom are drawn to shorter upgrade cycles. The program also complements Microsoft's strategy to sell software by subscription--a good theory.

Time is running out: One-third of eligible contracts with Microsoft's biggest customers will be up for renewal by July 2004.

In reality, it's a software maintenance and upgrade program that puts even greater pressure on customers to renew existing Windows software. And time is running out: One-third of eligible contracts with Microsoft's biggest customers will be up for renewal by July 2004.

Customers who decide to put off their decision beyond the deadline will be penalized with higher upgrade fees and miss out on product discounts. Small and medium-size businesses, which are the meat and potatoes of Microsoft's business, will suffer the most, because many don't have the cash to spend on increases in licensing fees.

Few customers need to upgrade the Windows server operating system every 18 to 24 months, which is Microsoft's typical product cycle. Many of the customers our company consults are still happy running Windows NT or 2000. Those running non-Microsoft mail packages have little need and even less desire to upgrade. Of course, Microsoft's Exchange mail servers are tied to specific operating system releases.

Most companies use their file servers to share files and printers. Linux offers a no-cost, secure and reliable alternative to the Windows server. As a result, we've been seeing an aggressive move from Microsoft-based servers to Linux or other platforms.

When it comes to Windows server software, it's tough to justify an added expense for an operating system that pretty much does the same thing as before. Try explaining that one to senior management.

When it comes to Windows server software, it's tough to justify an added expense for an operating system that pretty much does the same thing as before.

Customers also balk at the plan because Microsoft has a history of charging to support product upgrades that never occur. Microsoft has been charging customers to support SQL Server's upgrade--code-named Yukon--which has been delayed until 2005. That means customers paid twice--once for the initial license, and then again for the right to upgrade. What did they pay for? Vision and promises? For those who paid, let's hope that the ship date doesn't slip again.

Software Assurance would be fine if it delivers enough value to customers. But failing that, companies are going to be motivated to evaluate alternatives to Windows, such as Linux, which is already the fastest growing operating system.

Three years ago, we had one Linux server and less than 5 percent of our customers were talking about Linux. Today, one-third of our servers are Linux, and half our customers either run Linux in production or have Linux as part of their strategic plans.

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Microsoft's next-generation operating system--code-named Longhorn--won't be available until 2006, according to the company's most recent announcement. That means customers will have to wait at least two years for a dramatically improved version of Windows.

That also means customers have two years to dip their toe in the water with alternative platforms, or maybe even take the plunge and replace Windows. That's bad news for a plan that may deliver little software and even less assurance to customers supporting the Microsoft monopoly.

All this does offer a silver lining. Customers who decide to stick with Windows now have ammunition to negotiate discounts with Microsoft. The company has a lot at stake because it draws about a quarter of its revenue from licensing fees.

The customer's biggest ally is choice--the choice to adopt an open-source operating system for servers that is not tied to Windows-only computers or the burden of maintenance fees. Now customers have the choice to press for lower licensing fees, or abandon Windows altogether.

Biography
Ian Altman is the CEO of Rockville, Md.-based ITM Associates, a software and consulting company.

More Perspectives

[Clues]

Windows / Longhorn and the Cycle of MS Extortion

Since Gates has already admitted that Longhorn will NOT arrive
until 2007 and any IT department would be foolhardy to deploy
it for at least another year, it will be FOUR YEARS before any
meaningful change can be implemented. Of course any
improvements are at best theoretical at this point.
Meanwhile security exposure is rising exponentially using
Windows or anything Microsoft.

At current security failure rate rises anyone planning for four
more years of Microsoft must budget for doubling of IT workers
and tripling of the IT budget over this time frame.

Linux is a steep learning curve for most IT departments
requiring increases in both IT costs and manpower. Since every
operating system other than Microsoft's are UNIX based it
appears this IS the future, if we hope to ever achieve a degree of
security and cost containment. The sooner a company makes the
move to UNIX be faster one can contain cost increases and get
control of security.

In the short term a move to Linux is logical due to the
established hardware base and Linux's inherent slowing of the
hardware upgrade cycle. Looking out two to four years though
the rate of commercial grade applications development is simply
not rising to meet the challenge. The only player in the UNIX
field that is producing a development environment to meet
future and present needs for most small to mid size companies
is Apple's OS X. OS X offers a short learning curve with UNIX
underpinnings stability and security combined with a very short
software development cycle.

All indications are that best practice planning is migrating the
base hardware to Apple / IBM's industry leading 64 bit G5 and
future G6 hardware for productivity, reliability, security and
rapid decreases in IT costs in both manpower while
exponentially increasing security over Windows and Linux alike.

Best Practice?

All indications are that your suggestion might be considered best practice in Cupertino, Mr. Jobs, but in the real world, people have found, and will continue to find, better alternatives.

[bjbrock]

The consumer has himself to blame.

The IT consumner failed to take responsibility for educating himself before making decisions which are now proving costly. And now, they are looking for a quick fix, the same mentality which got them where they are. MS, Apple, UNIX, Linux, or whatever you think is the answer, is just more problems waiting to happen. The IT consumer has got to rethink his approach before any possible solutions can be hoped for. The IT consumer has had very good solutions to choose from in the past but decided on quick and easy over functional and productive. From IBM's OS2/WARP on the desktop to Netware at the server level, there were productive solutions available. OS2 was out when Win95 hit the streets. It was uncrashable, and pre-emptive multi-tasking and better than anything MS or Apple or Linux has today. Novell may kill everything they touch but Netware was and is the best network OS period. It's NDS provided controll of resources unlike anything else that we have or had. By default, anything that will trully be worth having, will require that someone learn the ins and outs to reap the benefits at hand. IT wanted a no brainer and opted for Windows. And in fact, MS has never had an OS, desktop or server, which could trully provide sound IT. They have never had an original idea and when they copy ideas from their superior competition, it ends up looking good but falls way short of true functionality. Active directory is one big joke. ZDNET stated, "If you understand Novell's NDS, then understanding Active Directory will be easy." Copied! And then half baked. Keep those alternatives coming but don't expect any improvements. Most IT personnel are under qualified, under motivated, and have no understanding of the business end of IT. Which, good or bad, is the final determiner of IT's future.