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Microsoft planning licence fee hike

Company plans progressive elimination of BackOffice concurrent licences

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The 'review' of licensing policies Microsoft said it was undertaking last week (see separate story) is going to cost customers a bundle, according to a forthcoming Gartner Group study. At Citrix's Thinergy conference in Florida Microsoft came under considerable fire over its refusal to countenance concurrent licensing deals for NT Terminal Server systems, but its plans for the consolidation of several different licensing models seem to mean less, rather than more, concurrent licensing. The concurrent model, where users pay for a maximum number of clients connected at any one time, is particularly appropriate for thin client-server systems, but also clearly applicable to Microsoft BackOffice applications. Not all users with rights to connect to an NT Server or to use, say, SQL Server across the network will be doing so at any one time, so by licensing a fixed number of concurrent connections rather than paying a fee for every single client that might be connected businesses can save a great deal of money. That however is money that comes straight off Microsoft's bottom line, and says Gartner the company intends to slowly eliminate the concurrent licensing provisions it has at the moment, with BackOffice a major target. Whether or not it will be able to sustain this is a different matter. As regards Terminal Server, customers are becoming increasingly aggrieved at having to shell out what could be more in operating software licence fees than on the client hardware itself, and a common view at Thinergy last week was that the company was digging a very large hole for itself by refusing to countenance concurrent licensing. Conceivably, as the thin client-server model becomes less obviously chained to Windows NT, perceptions of disproportionately high costs for NT Terminal Server systems could lead to companies heading for Sun, RS/6000, AS/400 or NetWare instead. Elimination of concurrency for BackOffice will also be tricky. Microsoft takes the view that total cost of BackOffice systems is far less than the mid-range ones it likes to compare them to, and therefore probably feels there's room to claw-back revenue without eroding this price advantage too severely. But simple elimination of concurrency could easily lead to increases of 200 per cent in a customer's licensing spend. This probably wouldn't prompt many existing BackOffice shops to defect, but would be a major negative for companies considering moving to BackOffice.

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