Customer Complaints Delay Licensing Changes

Responding to an outcry over major changes to its volume licensing programs, Microsoft will delay some changes until July 31, 2002. In addition, the company has loosened rules that could have coerced companies into buying Office XP upgrades sooner than they wanted to. Although this delay—it adds another five months to a transition period which was extended by a month once before—will give customers more time to budget for the changes, and might have a short-term impact on adoption of Office XP, Microsoft remains committed to license changes that will nudge customers toward subscriptions for software and will generate more revenue for the company.

The retreat in implementing its new volume licensing plan exposes some significant problems in Microsoft’s market research and planning, although it also demonstrates that the company will change its policy if the outcry from customers is loud enough,

New Rules for Upgrades

The most controversial feature of the new licensing program is a plan to replace all volume licensing upgrade programs with a single upgrade program called Software Assurance (SA), which is unlike any previous Microsoft upgrade program and, indeed, unlike upgrade policies in place elsewhere in the software industry.