Gartner Group Criticizes Licensing Agreements

A debate between Microsoft and Gartner Group over Microsoft’s licensing terms and disk “imaging” has raised the possibility that millions of corporate PCs are in violation of software license agreements. Gartner says Microsoft is using little-known restrictions in its licensing agreements to generate new revenue, while Microsoft says it only wants to make sure that customers understand the differences in usage rights that various types of licenses confer.

Rules for Reimaging

The disagreement highlights a common corporate practice—copying a “ghost” or “drive image” of a completely configured machine (including the corporation’s applications, desktop, and network configurations) to new machines. As Gartner analyst Neil MacDonald describes it, “A company might buy 1,000 machines from an OEM and build the image they want on one of them, then copy that image to all the other machines. Microsoft contends that those other 999 machines are then in violation of their OEM license.”

According to “The Facts About Microsoft Volume Licensing Options,” a document on Microsoft’s Web site that responds to the Gartner report, an OEM license is not valid “on any machine other than the machine on which it came.” Companies who reimage an operating system (OS) from one machine to another, even if it is an identical version of the OS, and even if they have a Select license agreement, must also have a license that permits upgrading—a version upgrade license, a competitive upgrade license, an Enterprise Agreement, or an Upgrade Advantage license. Consistent with this understanding, Microsoft took measures this year to prevent a copy of a Microsoft OS that ships on a PC from a large OEM from being installed on a different computer. Any CD-ROM that is included with a new PC must be “BIOS-locked” to the PC in some way to prevent the CD from being used by other PCs. However, BIOS locking can be as general as ensuring that OS software delivered with one manufacturer’s machine will not load on another manufacturer’s machine. (See “OEMs Asked to Change OS Distribution to Combat Piracy” on page 3 of the Jan. 2000 Update.)