“Microsoft Corp.’s new licensing programs take effect tomorrow, shifting the model for OS pricing but also for office productivity suites. Microsoft’s Volume Licensing Program, delayed twice, kicks in on July 31. The most controversial feature of the plan, Software Assurance, is essentially Microsoft’s subscription-based licensing plan for small- and medium-business owners. An enterprise version of Microsoft’s software license already requires a yearly fee.” Read the report at ExtremeTech, Yahoo!News, while News.com says that the majority of Microsoft’s customers won’t be signing up for a controversial licensing plan set to go into effect on Thursday, according to analysts’ estimates.
How Will Microsoft’s Licensing Plan Affect Office?
About The Author
Eugenia Loli
Ex-programmer, ex-editor in chief at OSAlert.com, now a visual artist/filmmaker.
Follow me on Twitter @EugeniaLoli
Has anyone ever noticed how Microsoft is like a drug dealer? It got everyone hooked on the product a long time ago, for much less money, and now it’s using it’s customers’ addiction against them. It charges unreasonable fees for its products (IMHO), and those prices just keep going up. Now with subscription fees, it doesn’t matter if new products are laced with crap (to keep the analogy rolling) because the addicts have already paid for them.
I see a few possibilities for the future of Licensing 6:
1) Customers will detox and drop MS products, looking for cheaper alternatives.
2) IT departments’ budgets will hemmorage and as a result will injure or kill the company’s bottom line (or put it out of business – less likely)
3) A few addicts will cut other items to be able to afford the addiction – like new personnel, hardware, bonuses, pay raises, benefits, etc.
Any way you look at it, this new scheme has the potential to hurt MS’s long-term revenues. Sure the addicts that bought into Licensing 6 are hooked for now, but if they don’t get the fix they expect from this new scheme, then they will be looking for a new dealer when time is up.
People and companies already use a lot of subscription services -telephone bills, internet connections, cables, cleaning services, insurance, etc .. etc. Sofware subscription seems somewhat strange because, that’s not the way they started selling software in 1982. It will NOT ruin anybody or any business. And if microsoft succeeds in this, IBM, SUN, Oracle and anybody who has any kind of software business will be more than glad to switch into a subscription-based model. You might as well get over it quickily.
somehow i don’t see even MS getting away with this…user’s will just keep what they have…seriously, what’s must-have for BUSINESS users in the current generation of MS products? not enough to lock yourself into perpetual bondage…especially with the cuts in most IT budget’s…there’ll be a lot of “let’s wait and see” attitudes
yet another sign MS has lost touch with reality
“It charges unreasonable fees for its products (IMHO), and those prices just keep going up.”
Your crazy….eveything goes up in price. Its called inflation…get used to it its not going away.
Remember when you could get a gallon of gas for $1 a gallon or when cheeseburgers at McDonalds where only 25 cents…lol
You must live in a different world to think cost for businesses does not go up like eveything else.
“Customers will detox and drop MS products, looking for cheaper alternatives.”
This will never happen until someone can offer something for the average Joe user to use. I know some people are going to say OpenOffice.org or something but you have to remember training these individuals and also the time spent by an IT staff doing so is extreamly expensive.
Usually people thinking of drugs are the addicts themselves.
MS is raising prices because they can. Their goal is to take away from from their clients bottom line and put it back on their own.
I think a lot of people are going to dump MS
Remember when you could get a gallon of gas for $1 a gallon or when cheeseburgers at McDonalds where only 25 cents…lol
#1 Inflation is extremely low right now and has been for over a decade in the US. This alone cannot account for a large increase in product price. The large increase is either because they weren’t charging enough to cover their butts in the first place, or because they want to make more money now. Inflation is a less than 2% adjustment per year.
#2 Gas prices fluctuate significantly compared to inflation. Remember the all time gas price low since 1980 was in 1998/1999, when it was possible to buy unleaded gas in the US for as little as $0.70/gallon. They peaked in the early 80’s, and then again in the late 90’s and early 21st century (so far).
Yeah, but there’s a difference: most subscriptions people pay for result in at either a minimum amount of “bang for your buck”, (flat-rate long distance) if not a regular dosage (magazines). From what I’ve read so far today, it looks as if Microsoft has the option of releasing what it likes when it likes. This would mean that if the majority of its customers’ subscriptions were about to run out, it could delay the next release until just after they ran out, forcing them to pay a second time for a product they didn’t even get to use after the first payment.
“The large increase is either because they weren’t charging enough to cover their butts in the first place, or because they want to make more money now. Inflation is a less than 2% adjustment per year”
This may be true but Microsoft has also grown alot as a company and moved into many more sectors then they have covered in the past…..having developers, analyst, marketing people…etc. cost money and as the company grows it will even cost more money.
“This would mean that if the majority of its customers’ subscriptions were about to run out, it could delay the next release until just after they ran out, forcing them to pay a second time for a product they didn’t even get to use after the first payment.”
GET REAL!!!
“GET REAL!!!”
I didn’t say they would, just that they could, legally, according to what today’s news sources say. For the record, I couldn’t realistically see them making such a move, but then again, I couldn’t see them making the move they are right now, either. Microsoft redefines “acceptable business practises” on a daily basis, but hopefully the community will some day step up and put its time and money where its mouth is: alternative OSes.
Why is everyone surprised or annoyed by the fact that Microsoft’s products are more expensive now? Everyone wants Microsoft products, hence, they can increase price without losing too many sales. How often did we read that customers bite the bullet and pay Microsoft “that one more time”? Unless something really intrigueing is coming out of the non-Microsoft camps (Linux, Apple, OBOS, etc), they can keep doing what they are doing.
What I haven’t read about so far is: do we even need all those new products? For many, many professions that use MS Office, for example, they can use it for many more years. Office XP is packed with features. What would a word processor or spreadsheet program need to do in a few years from now? It might be much cheaper to just use what you have for a much longer time. Products improve all the time, but there is only so much you can do when writing a document…
It’s true. In our large company we still use Office 97 practically everywhere.
it’s called heroin economics
90% of my office use Linux or FreeBSD already. This may just point the rest of our offices this way!
I realize the office suits need work, but they are functional and work very simular to MS office. I wouldn’t take long!
(That semms to be the future, pay to have mp3, pay to have oriented search engine results, pay…)
Why would someone pay each year to have a new version of an Office suite that makes an update on bugs and does almost the same as the previous.
Companies, small or big, will not; and maybe they will if they find their personal can’t use another software to do the same tasks in the same time (this is possible with Microsoft products addiction, it makes people blind, idioticized, whitout criticism qualities); but the average user will certainly think twice before he/she gets screwed.
F??k Microsoft and their late licensing schemes (winXP activition is bull???? also. I have win2k and Office2k but I will never buy their licensing +*,*>>}§ !
Maybe I will start to aprove reverse engeneering.
If your so anti MS why are you running W2KPRO and OFFICE2000? This makes you an MS addict just like the people you are tring to describe.
“F??k Microsoft and their late licensing schemes (winXP activition is bull???? also. I have win2k and Office2k but I will never buy their licensing +*,*>>}§ !”
Your first remark says you hate MS and anything about them but your second remark says you use their products (even if you pay for them or not)….use your alternative if its so much better.
Don’t get me wrong but this is what is hurting the alternate’s for office…..tons of people say MS sucks and so forth but I would bet 75% have a Windows OS and Office Installed.
My 2 Cents
Microsoft has 3 licensing models: Open, Select and Enterprise. Enterprise is already a subscription based license for a number of years — all the fuss is about microsoft turning subscription on open and select license. And more corporate customers are switching to Enterprise license right now. So it’s not that bad that 1/3 to 2/3 of corporate customers not signing license 6 (because some of those people are signing the Enterprise package).
IBM has always sold (30 years) their big iron OS as a subscription. SUN and Oracle also have subscription based licensing. In that regard, Microsoft is the last company to switch.
Go to the court transcipts and you will find out that Microsoft charges the same OEM price for WinXP as WinME. There was no price increase for OEM’s.
Windows_rocks, I only took economics for 3 years in high school, but i think I know enough to say inflation has nothing to do with this. The rule of economies of scale states that the larger the product base, the more savings they can make on their fixed price part of the cost. This is expecially true for software since the cost of reproducing software once the prototype has been made is like $2
Eg. it costs me $2000 to develop this software and $10 per copy to distribute it and provide support for a year.
If I sell 2 units, I will need to charge $1005 to break even
If I sell 2000 units I will need to charge $2.005
While it could be argued MS has become so big it has entered into the diseconomies of scale phenomin where the company gets too large to be managed effectivly, these increase should not lead to the huge price rises they are making.
I personally would blaim the economoic downturn, the bleak future outlook as OS takes hold (maybe?) and corperate greed.
Your first remark says you hate MS and anything about them but your second remark says you use their products (even if you pay for them or not)….use your alternative if its so much better.
I said I use MS products (and like them also) so I see no real alternative, and, this way, I’m being honest. I try not to hate anybody or anything.
What I don’t really like is the schemes MS use to make *money* and control every step their customers do and every new machine they buy. If it were not so I would have bought an upgrade for OfficeXP if the price was fair (but not to bloated winXP).
I also heard that .Net server OS (soon to be released) will be on a similar licensing policy and corporate customers will not go for it. I think they (MS) will increase win2k because of this (but maybe they will close win2k sales
So what you are trying to tell here is that since everything get’s more expensive due to inflation is the reason why the entire IT is getting cheaper buy the minute except for MS..? – not quite…
it wont affect my office, since i switched everything to Linux & OpenOffice, ph, i do keep one piece of crud Win98se mechine with Office97 in a backroom just for the idiots too stupid and too stubborn to quit using windoze, i dont bother to update it or run any antivirus or firewall on it, but if it gets cracked or infected i just format C: and ghost a clean image on it in a minute…
windoze is a waste of time and effort, and an excorisz in frustration, Linux made my office FREE!!!
If my company wasn’t on a leasing program from Dell, we’d be just as comfortable in the Year 2002 using Office 97 as using Office XP. Want to know why? Because in 5 years the only additions to Office (aside from the zillion bug fixes for Outlook) have largely been cosmetic and a couple of “productivity enhancing features” that are so annoying you’ll turn them off after 10 minutes.
If any company is really serious about saving money, they can stick to older versions of Office (97 – 2000). All of the core functions and features that make Office good were already in the 1997 version.
One more thing…if you don’t like the licensing scheme, go out to the store and buy individual copies! Sure, they cost about $500 each, but if it’s for business it’s worth it. Home users can stick to Gobe Productive if they want to save money. Do graphics companies wine about PhotoShop, another standards-bearer of commercial computing?
How wrong you are! There were smart tags in 2000 and 97….I don’t think so.
All the office products were streamlined and very friendly with each other in 2000 and 97…..I don’t think so.
Access has improved drastically from 97 and 2000 to 2002
Smart Tags…only useful to some.
Streamlining and friendliness…we’re finding Office XP to be a major pain and miss Office 2000. YMMV
Access…Serious database work is done with SQL Server 2000, if you’re inclined to use MS’s database products.
“Re: Here’s the dirty little secret about MS Office (and a bit of rant)”
lol….how wrong you are again….don’t get me wrong SQL is the perfered way but plenty on companies use access.
Access is used tons on the client side…..Ive even seen some fully functional corporate apps built in access but hit SQL backends.
Another point is some companies cannot afford SQL Server, Seats, and not to mention a powerful server to house it all.
Perhaps Windows_Rocks could tell us how in the world OpenOffice could be given away for free, considering inflation & all. Or how alternatives from Corel can be priced sooooo much lower.
They’re all shit. They must be…
First OpenOffice is a community project…..duh…..second corel doesn’t even compare to Office…..ever hear the saying you get what you pay for?
“They’re all shit. They must be…” I never said any of them are shit…..Just MS Office has the most functionality and ease of use for most users.
OpenOffice is great…I use it alot but because of no DB and Email client it does not please alot of users.
Corel Office can do anything MS Office can, its not harder to use either, the functions are just in different places. I’d even say Corel Office is far better. How come Corel has had an excellent grammar checker for years, and MS Office’s grammar checker still sucks (Its not quite as laughable as it used to be but it still doesn’t even compare to 486 era versions of WordPerfect).
Well we can talk about the price of gas and hamburgers, but how about the cost of technology? I only reluctantly lump Microsoft products into a technology catagory, but I think most would agree that it’s the closest fit. The price of technology has typically plumetted. So it would be resonable to expect the price of Microsoft products to go down. Also, this would be in accordance with the laws of supply and (apparent)demand. Personally, I’ll never install Office unless it’s for support purposes, in which case an evaluation version should work just fine.
“The large increase is either because they weren’t charging enough to cover their butts in the first place…”
I think “they” are probably charging enough to cover their butts… with the cash or probably gold leaf, for that matter. : ) Microsoft is simply sending a message that they think they are everybody and if you don’t want to pay them plenty, then you don’t matter to them.
This site is filled with more and more smucks everyday.
No it want, but why not? What about your keyboard? or your fridge?
“No it want,” Learn how to spell smuck.
Despite the fact that you, “Anonymous” and also “Anonymous” are apparently near geniuses (based upon the amazing depth and insight filling the comments you have graciously bestowed upon this thread) I believe the word you are attempting to spell is “shmuck”. Better luck to you the next time you try.