The deadline to sign up for Microsoft’s new Licensing 6 plan is July 31, 2002. According to Microsoft, the plan will give you “access to the technology you need to stay ahead of your competition in the most cost-effective way possible.” But the plan may not be what every IT manager needs from the software giant.

One provision of the plan that can affect how managers set up their shops for the future is Microsoft’s Software Assurance (SA) program. Under SA, current Microsoft customers, including large organizations or a single user, will pay an annual fee to receive and purchase software upgrades at a discounted price when Microsoft releases new version upgrades. Nonsubscribers will pay full price for an upgrade to a new product.

SA contracts can be two or three years long, and there is no guarantee on the number of software versions Microsoft will release while you’re under an SA contract.

“I don’t think Microsoft realizes that there’s actually a negative energy (about) upgrades. So by doing that, they more or less add to that negative energy,” said Greg Brill, president of Infusion Development Corporation, a provider of software development, training, and consulting services for financial firms in New York and Toronto.

The new plan forces Microsoft customers who want a discount on upgrades to sign up for SA. This strategy may not benefit many organizations, Brill said, whose corporation is also a Microsoft Certified Solutions partner.

Tell us what you think

We want to know how you feel about the changes that Microsoft will implement on July 31. What is the company’s motive behind the new plan? Have you signed up for it? Why or why not? How will it affect you and your shop? Drop us a line or add to the discussion below.

As managers know, upgrades are a hassle in any size of shop or organization. Upgrading operating systems software on a regular basis is probably not what most managers want to do. But under an SA contract, it could happen. For example, if you paid for an SA contract for three years and during those three years, Microsoft came out with three different OS versions, you could upgrade to a new OS once a year.

“By charging for upgrades before the upgraded product is even written, Microsoft is putting the cart before the horse,” Brill said.

For a manager in an organization with several thousand users, this scenario would be a nightmare because there are so many issues to consider before upgrades can occur. For example, if you upgrade to a new version of Microsoft Excel or Microsoft Word, you have to make sure that the current documents running on these applications will also run on the new versions. Accidentally forgetting to convert one key spreadsheet could slow down your organization’s production.

“When you go to a new version and you upgrade, you’ve got to make sure that all of the things which did work, still do…and it’s really expensive,” Brill said.

There are hidden costs to consider with every upgrade, Brill said. You have to look at the extra cost of training your team or the user base to use a new OS, for example. And some analysts believe that the new program could raise the cost of upgrades for a large company.

The Licensing 6 plan and the Software Assurance program will change the dynamics of many of the relationships Microsoft currently has with its customers. We want to know how it will change your relationship with the company. Here are some questions to consider:

  • Have you signed up for the new plan?
  • If you have signed up for it, why do you think it’s the right fit for your organization’s upgrade needs?
  • If you will not sign up for the plan, why not?
  • Do you think the new plan will save organizations money in upgrades?
  • Do you think it will cost more for organizations over time?
  • What do you think Microsoft’s motives are for implementing this new licensing structure?
  • How do you think it will affect the company overall?
  • How will it change your relationship with Microsoft? For the better? For the worse?

Tell us what you think about the new plan. Send us an e-mail or join the discussion.