Microsoft’s Licensing 6.0 and Software Assurance Upgrade Plan

Were you lucky enough to receive a white envelope from Microsoft in late April or May? The one a number of CIOs reported receiving that reminded them about the looming July 31 deadline to enroll in Redmond’s Licensing 6.0 and Software Assurance upgrade plan? (See “The Meter Is Running,” at www.cio.com/printlinks.)

Microsoft recently made what the company calls a final, $10 million, don’t-say-we-didn’t-warn-you push to reach corporate customers before it starts charging for software in a new way. The deal under Licensing 6.0 and Software Assurance: Customers pay a fee per year to use Microsoft software and acquire upgrades. Letting the license lapse means paying full price for the latest version of any Microsoft product, whether it’s Windows or Office.

CIOs are not happy. According to them, Microsoft’s new licensing plan is too expensive. One CIO at a midsize manufacturing company arrived at work one spring Monday to find the white envelope on her desk. “There’s like five sheets of info. Pretty charts,” says this CIO, who declined to be quoted by name. The numbers accompanying the charts weren’t so pretty. Our CIO reports her midsize company would owe about $170,000 for 250 PCs using Office. “I’m not going to my CFO with that,” she says. Later, she shared the news with her Microsoft sales rep: “Forget it. I’m moving to StarOffice and Linux.”

A week passes. A similar white envelope appears, this time on the desk of the company’s CEO. “He’s infuriated,” she says. “He wants to know how they have the gall to ask for this much money for word processing.” She gets executive buy-in on her Linux plan. A new plant-monitoring system will use thin clients on the shop floor?running Linux.

Microsoft officials say its mailings are just one part of an effort that has included 150 seminars for customers, conference calls with industry analysts and training sessions for its resellers on how to pitch the licensing program. Large customers are contacted a minimum of four times. “We want to do everything possible to make sure they aren’t caught unaware Aug. 1,” says Rebecca LaBrunerie, Microsoft’s group manager of worldwide licensing.

Our midsize company CIO, though, refuses to enroll in Licensing 6.0 and Software Assurance. “I’d rather use Office ’97 for the rest of my life if I had to,” she says. But she doesn’t have to. She has already begun testing systems running Lotus Notes and StarOffice, on Linux.