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.