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ComputerWire: IT Industry Intelligence

The majority of Microsoft Corp's enterprise customers risk missing the deadline for looming licensing changes, and face massive increases to software price rises as a result.

Analyst GartnerGroup warned yesterday customers who miss the July 31 start for Microsoft's Licensing 6.0 could pay up to 45% more for software at their next upgrade cycle.

The reason is that after this date, Microsoft will eliminate a series of one-time upgrade programs - such as Upgrade Advantage - for the all-encompassing Software Assurance (SA).

SA spans the life-cycle of new versions of Microsoft's Enterprise Agreement and Select programs and gives customers the right to install any new release of a Microsoft product covered in the agreement's life-cycle.

SA is an integral part of the new Enterprise Agreement but is optional under Select. Customers who do not adopt SA with Select 6.0 on July 31 will be excluded from upgrade options, and forced to buy new copies of Microsoft software at full price.

Gartner warned up to two-thirds of customers risk being affected. Gartner research director Alvin Park estimated 65% of organizations have either taken a conscious decision not to adopt Licensing 6.0 or simply procrastinated.

Park strongly urged procrastinators to take urgent action. He estimated negotiations could take up to 30 days as final agreements required sign-off from the customer, reseller and Microsoft. "This can take weeks to months," Park warned.

Non-procrastinators, though, are likely opposing Licensing 6.0 on cost. A separate Sunbelt Software and ITIC research of 1,500 senior IT executives published recently found 37% will not adopt Licensing 6.0 and that 36% are unable to afford the new program. Thirty eight percent are seeking alternatives to Microsoft products.

Park said one option would be for customers on Select 5.0 to simply renew their existing agreements. The combination of Select and Upgrade Advantage offers customers the potential for "significant" savings he said.

Microsoft was unavailable for comment.

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