Customers unimpressed with Microsoft licensing changes

Microsoft's attempts to placate customers by revamping its controversial Software Assurance (SA) volume licensing programme have been slammed by IT directors who want a complete overhaul of the scheme.

Microsoft introduced the subscription-based SA four years ago to replace a volume licensing discount scheme that allowed customers to upgrade when it suited them. Under SA, users get free upgrades and other add-on benefits for the three years of their subscription.

One of the main complaints from customers about SA is that delays to the release of new Microsoft software such as Windows Vista has left them without upgrades they have effectively paid for.

In response, Microsoft has this week introduced the biggest changes yet to the SA scheme in an attempt to placate dissatisfied customers and boost flagging take-up of the licensing scheme.

Eight new benefits have been announced, including the scrapping of the 90-day deadline for signing up; desktop deployment planning services for customers with Select or Enterprise agreements; exclusive access to a Windows Vista Enterprise edition when it released in late 2006; an increased cap on training vouchers; and better technical support.

Brent Callinicos, corporate VP of worldwide licensing and pricing at Microsoft, said in a webcast: "Since its inception four years ago, we've regularly fine-tuned Software Assurance in response to feedback from our customers and partners who have helped us determine that we need to further infuse this offering with additional services and support."

But users claim the changes don't go far enough. Luke Mellors, IT director at the Dorchester Hotel in London, said he initially took out SA and then dropped it.

"Taking out an insurance policy on the future of technology at 27 per cent of the cost price of software per annum does not add up financially, practically or strategically. Using value-added services to make a bad investment appear better is rather like using a plaster for a gunshot wound. Microsoft continually places its needs before customers when it comes to licensing," he said.

Instead of trying to save SA with new benefits Microsoft needs to "take a step back" and review the process in its entirety, said Mellors.

Ian Auger, IT director at ITN, agreed. "Unless you are a massive company or happy to spend lots of money, it is very hard to get a cost effective solution without having to continually commit," he said.