Microsoft extends deadline for new licensing program

Scott Hillis

SEATTLE: Microsoft Corp. on Monday extended a deadline for business customers

to sign up for a new and potentially more costly software licensing program,

saying it wanted to give them more time to evaluate it amid the gloomy economic

climate.

The change, which pushes back to July 31, 2002 a deadline to switch to the

new program, came after many customers complained that Microsoft had too short a

timetable for signing up, the company said.

Microsoft recently extended the deadline from October to next February, but

continued customer feedback made clear the need for even more time, company

spokesman Dan Leach told Reuters.

"Customers helped us understand that we underestimated the amount of

time needed to launch this new program, especially in light of current economic

conditions," Leach said. "They needed time to review their existing

licenses and decide how to best take advantage of the new program," Leach

said.

Microsoft, the world's biggest software maker, is best known for its Windows

operating system and Office package of productivity software. Both of those

products are common in businesses large and small.

While average consumers buy products like Windows off the shelf or already

installed on a PC, businesses and institutions sign bulk licenses that can cover

thousands of PCs and include upgrades to future versions of the software.

'Rebellion'



In May, Microsoft announced changes to its licenses in a way that encourages
customers to upgrade to new products every couple of years. Those who do not

upgrade frequently would find their costs rise.

Called Licensing 6.0, the program also cut back the number of license

options, a move Microsoft said would make it easier for customers to manage

their software. Microsoft has said the new program is a step toward delivering

software as a subscription service rather than as a one-time product, and

analysts have said it will help the company unchain itself from the personal

computer sales cycle.

But while Microsoft said the changes would be "financially neutral"

to it overall, several market research firms have said costs for many customers

will rise sharply. Coupled with a tight timetable for switching to the new

licenses, Microsoft found itself facing a customer "rebellion", said

Dwight Davis, an analyst with Summit Strategies.

"The economic conditions are really a factor but it also gives Microsoft

a nice exit from a policy that is being greeted with dismay among many of their

large customers," Davis said.

"There's clearly been an uprising among the user community. Microsoft

isn't addressing all the concerns, but this does give some measure of recompense

and it gives Microsoft more time to further tweak the system if necessary,"

Davis said.

(C) Reuters Limited 2001.