MS doubles prices for enterprise customers

Microsoft has introduced a price increase that will affect customers of its Select enterprise license scheme. According to the Gartner Group, a subtle change in policy will double the cost of Windows where businesses use imaging programs, such as Norton Ghost for convenience. That snares 60 per cent of all enterprises.

"Microsoft is benefiting from confusion related to this issue to increase revenue from upgrade licenses... Microsoft has effectively doubled the licensing cost for Windows," says Gartner in a research note.

It works like this. Many of Microsoft's business customers typically use the Select licensing program, and burn a tailored version of this software for their desktops. But they also receive OEM copies of Windows bundled with their PCs. Previously, they were allowed to "reimage" the Select copy of Windows to overwrite the bundled OEM version. Not any more - now they'll have to choose from one of four upgrade programs priced between $117 and $151 per desktop.

But it gets worse. OEMs don't like their version of Windows being overwritten with a version unknown, and so reimaging nullifies the OEM support contract. And Select doesn't cover you for support - that'll be another $375 per support request.

This doesn't affect all enterprises - if you're using a Microsoft Enterprise Agreement that includes a mandatory Upgrade Advantage (UA), of if you don't reimage your desktop PCs, or if you've already got an agreement with your OEM to use programs such as Ghost, then you're in the clear. But the majority of enterprises will be affected says Gartner, and it issues the following advice.

It says customers should pressure Microsoft to alter their OEM terms. "The right to reimage a machine using Select media with exactly the same version of a Windows OS purchased from the OEM is not unreasonable but is now not permitted. Further, OEM support should not be lost," advises Gartner.

It also suggests pressuring Microsoft to allow the use of the OEM Windows image as the base for enterprise wide roll-outs. But the End User Licensing Agreement that comes with the OEM Windows doesn't always permit this. Alternatively, have the OEM create the image CD for you, or ... stop imaging altogether.

Thanks to the Kafkaesque nature of Microsoft licensing, Gartner even suggests that if you're planning on using Windows 2000, then buying a machine with Windows 9x preinstalled, and then purchasing a specific upgrade license, this will still be cheaper than buying Windows 2000 with one of the other upgrade schemes.

Gartner observes that the advice is being given in the form a Q and A issued to field salesmen, so there's the faintest element of plausible deniability in that this was driven from the top of the organisation. But we can't help wondering how the Supreme Court will view this development, when it has to weigh whether the Microsoft monopoly has harmed customers by raising prices. The news comes in the week that Microsoft raised issued prices for Windows Millenium consumer upgrades. ®

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