Microsoft

Time is money in XP migrations

CIOs may not be eager to jump on the XP platform, but if you've got thousands of desktops in your enterprise, that procrastination and indecision could double future XP licensing costs. Find out why you should plan now even if you're not eager to migrate.


By Jeffrey Schwartz

It’s not surprising, given the migration hurdles experienced so far, that many IT leaders aren’t planning to upgrade client PCs to Microsoft Windows XP Professional anytime soon. Yet CIOs who don’t at least consider the inherent long-term PC migration requirements now will likely pay a steep price for procrastination.

That’s because Microsoft’s new software licensing plan, which takes effect Aug. 1, 2002, will eradicate the company’s long-standing policy of offering discounted upgrades. But companies that lock into Microsoft’s old Software Assurance Plan before July 31 can save 70 percent of the cost of upgrading to Windows XP, explained Gartner research director Jon Mein.

The cost of XP migration
The most unlikely XP upgrade candidate—an organization just coming off a Windows 2000 migration—will feel the most monetary pain under Microsoft’s XP pricing plan.

For example, an enterprise planning to upgrade now will pay $108 for a two-year license under Microsoft’s Software Assurance Plan. But if it waits past July 31, it’ll pay $185 for a permanent upgrade. That $77 difference may not sound bad, but for a company with 5,000 desktops, for example, it means $540,000 compared with $925,000.

“There are no smoke signals from Microsoft that [it] will change [its] plans, so our advice is to take the necessary steps and plan for the upgrade,” Mein said.

To date, 65 percent of Gartner’s larger clients have yet to make a decision on whether to sign on to Microsoft’s licensing plan, but all are dedicating significant resources toward studying the issue.

Plan now, save later
The first step in planning for an XP upgrade is conducting an internal audit to determine how many existing Windows and Office licenses are still valid within the enterprise, explained Mein. This is a critical step, as it determines eligibility for upgrades.

While the goal of licenses is to stem piracy, many organizations unknowingly reuse licenses that are not valid, according to industry research. On average, 24 percent of business software is not licensed, according to the Business Software Alliance. The percentage is less for small corporate organizations and higher among individuals and small mom-and-pop-type businesses, Mein added.

Even small companies with no immediate plans to migrate to Windows XP can benefit from acting before the July 31 deadline.

“It’s too expensive to do it any other way in the long run,” said Matt Romero, a senior IT analyst at Valley National Bank.

Romero, who recently migrated 50 desktops to Windows 2000, had no plans to upgrade to XP until three new Dells arrived boasting XP. While the Espanola, NM-based bank has no plans to upgrade its non-XP machines, it realized that by buying a license agreement by July, it could hedge against future higher costs.

“As our life cycle of PCs comes around, we will inevitably start seeing more XP around here,” Romero said. The bank still has 18 teller workstations running Windows 98.

Purchase doesn’t mean commitment
Enterprises using Windows 2000 that don’t want to commit to upgrading to XP today should go ahead and purchase the new XP license, as it also permits them to run the current OS now and migrate later.

“If there is a problem, I can blow away XP and install Windows 2000,” explained Kevin Jones, LAN and Web site administrator with The Manufacturers Alliance/MAPI, a trade organization for the manufacturing industry. Jones’ enterprise just completed an upgrade to Windows 2000 Professional.

Yet, after reviewing an evaluation copy of XP Pro, Jones has determined the new features don’t warrant the cost of the upgrade.

“I am of the mind-set that if the software serves the purposes of the business, there must be a very compelling reason to change it. If Windows 2000 serves our purpose for the next 10 years, then why upgrade?”

Jones is not alone in that line of thinking. Since XP launched last October, analysts have been bearish that businesses would upgrade to the new OS. In November 2001, 59 percent of professionals polled in a TechRepublic survey had no plans to upgrade, and only 16 percent are planning to migrate this year.

Last year, Microsoft shipped 30 million copies of Windows 2000 Professional, according to IDC. While Microsoft won’t reveal its forecast for XP Professional, it will exceed last year’s Win2K shipments, said analyst Al Gillen.

“Not simply by a million or two, we’re talking in terms of double-digit percentage growth,” Gillen said. Most of those are expected to be from new PCs and upgrades to operating systems other than Windows 2000.

Jeffrey Schwartz is a longtime technology editor and writer who specializes in Microsoft coverage and technologies.

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