Technology Darwinism hits Microsoft's licensing policies

Technology Darwinism hits Microsoft's licensing policies

Summary: The time for good old-fashioned evolutionary extinction is at hand concerning Microsoft's licensing policies. The general consensus is in favor of that extinction.


While not unanimous, the overwhelming majority (83 percent) of you agree with me that it's time for some licensing policy change in Redmond. The Great Debate this week between Matt Baxter-Reynolds and I, "Can Microsoft's complicated software licensing policies survive?", yielded some interesting results on both sides of the argument. But the reality is that times are changing rapidly. No longer do individuals on or off the job want to be tethered to a single device. And that single device mentality is but one of the rubs against Microsoft's outdated licensing policies.

Let me preface my statements here by saying that I am not anti-Microsoft. I never have been, although some readers might have assumed it from my Linux advocacy and a few random rants about rebooting and stability of Windows operating systems. Those issues have been addressed over the years and I'm glad to say that Microsoft has done an excellent job with operating systems such as Windows XP, Windows 7, Windows 8 (Yes, Windows 8), Windows Server 2003, Windows Server 2008, and Windows Server 2012.

No company is perfect. And Microsoft has had its share of imperfections over the years, but they've always spoken to them and resolved them satisfactorily. I'm hoping that policy hasn't changed and that they will reconsider their very complex licensing policies that will continue to draw complaints, negative commentary, and hate mail.

The solution, in my opinion, is a subscription model. Office 365 is an excellent example of what can happen with this type of software licensing. It's a proven method and it works.

As I stated in the debate, a software subscription model is a win-win situation for Microsoft and businesses that purchase licenses.

Microsoft wins because software piracy will be minimal with subscription-based use. The company loses millions, if not hundreds of millions, of dollars every year due to software piracy. And I know what you're thinking — that it can afford it — but can you?

One of the reasons software is so expensive is because of piracy. Think about it from its perspective. They create an application such as Visio, for example. Microsoft spends millions of dollars in software development to create Visio. It pays its programmers a salary, takes care of their benefits, vacation time, sick leave, maternity/paternity leave, and other expenses.

It has a lot of money invested in creating Visio. It has to make its investment back plus a profit to stay in business. Additionally, it has to factor in loss due to piracy into that price plus free code maintenance in the form of upgrades, extras, patches, and service packs. It adds up.

It doesn't just create something like Visio in a vacuum. It has to support it for its entire life cycle with those updates and personnel who maintain the version you're on for years. Plus, it pays programmers to create new versions, so there's more expense. It's a never-ending cycle that's very expensive to maintain. Everyone just sees it raking in billions of dollars without looking at what it takes to make those billions.

From an Office 365-type delivery system, everyone could always have the latest version of Visio available. Microsoft wouldn't have to deal with supporting Visio 2003 until Visio 2013 arrives on shelves. It would support one version. No compatibility problems, no copying of the CD for a brother-in-law, no additional support for service packs, updates, hotfixes, or maintenance for three or four different versions floating around.

On the customer side of things, you'd pay a fee to use Visio per user, per month. Instead of spending thousands, tens of thousands, or hundreds of thousands on software all at once, you'd spend a small, predictable amount for subscriptions every month or on an annual basis.

Everyone in your company would have the same versions of the software as everyone else. The company across the country, your customer, would also have the same software. No file conversion, no need to Save As and no need to make apologies or excuses for not having an application that matches your customer's or your supplier's.

There would also be no need for those annual software audits. No pressure from the software piracy police breathing down your necks to true up or get fined. Subscriptions make it easy to know how many software licenses you're using, how much it costs, and you never have to worry about compliance. You're covered.

So why hasn't Microsoft embraced this model?

I don't know why.

It makes a lot of sense to me and to a lot of you as well. Antivirus companies are doing it. is doing it. Google is doing it. Apple is doing it. Adobe is doing it. In fact, here are three customer quotes from Adobe's website concerning the subscription model:

"The flexible monthly payments help me work more economically as a sole proprietor and choose the software I need, when I need it." — Damian Cooke, freelance designer

"We continue to use the subscription option of Creative Suite because it is kinder on our cash flow and alleviates the need to worry about software updates on our own. By signing up for the month-to-month plan, we have the flexibility to pay for what we need, when we need it." — Liza Bloomer, creative director at Yoohoo Web & Graphic Design

"Adobe Creative Suite Subscription Edition keeps my cash flow healthy and my costs predictable — all while ensuring that I always have the latest software versions and newest features without having to upgrade on my own." — Joel Coleman, saltmotion

It's a good model. To subscribe to Photoshop for $19.99 per month instead of plopping down $600 or more for it sounds fine to me. I'm onboard with that.

Change is hard. The traditional software model has worked for x number of years, but now it no longer works. Microsoft will have to change with the times.

So, no, Microsoft's complicated software licensing policies can't survive. And they shouldn't.

Everything evolves. Software has been slow to change. As much as technical people like to think that they're on the leading edge of what's going on, they more they fight to keep the status quo.

Allow the evolution to take place. You can't fight it forever.

What do you think of Microsoft's software licensing policies? Survival of the fittest or endangered species? Talk back and let me know.

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Topics: Microsoft, Software, Software Development


Kenneth 'Ken' Hess is a full-time Windows and Linux system administrator with 20 years of experience with Mac, Linux, UNIX, and Windows systems in large multi-data center environments.

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  • Fully agree with you, except

    "no need to make apologies or excuses for not having an application that matches your customer's or your supplier's." -- assumes Microsoft is the only game in town. Which is not true.

    That issue is resolved by Microsoft and others following standards compliant file formats and protocols. Doesn't matter what the software version is. Or the software author.
    • Microsoft = Corruption itself, don't defend them!

      full agree with that Microsoft has stolen milliards all over the world through its bribery!!
      facts are here:
      bit [dot] ly/RYzOPP

      "bribing in Italy, Romania, China."
      "bribery in Slovakia, Czech republic, Hungary,..."
      "Because of the trust Apple+Microsoft+Adobe you have to pay more for IT in Australia"
      "Microsoft earns probably more money from Android with blackmailing Android producers"
      "Microsoft bribes Best Buy staff to slam Mac and Linux."

      don't defend such a briber who has stolen our money through corruption!!!
      • And you have proof of all this, anywherehome?

        I can make the same list, substitute MS for any other company, and it will still be just as true as your list.
        • This article is about Micro$oft's licensing policies

          Not everybody else's licensing policies.

          Get a clue. DOH
          • CaviarGreen logic

            "No I don't have evidence regarding anywherehome's claims, but this article is about Microsoft and I don't like them, so you can't dismiss his/her comment because REASONS!"

            -- CaviarGreen logic
          • Absolutely

            READ THE ARTICLE.

            It helps (you) instead of logging in to another sock puppet and pretending to be somebody else, doesn't it Nidaz?
        • you just lie

          No, such a rotten company is hard to find ;-)
      • These examples are all hearsay

        Has the justice system in any those respective countries found Microsoft guilty of any criminal offense?

        In the end, if you don't like Microsoft for any reason, you do not have to buy their products. No one is forcing you.
        M Wagner
        • you li

          You lie, we have to use it because govs want us to use their formats because of corruption ;-)
          Who has the money he wins in court, its a secret for you? ;-)
      • Bribary? OMG! In the USA...

        ...we don't have such bribary. We call it "political campaign controbutions" here. The government is in charge of shaking down businesses. And they are very serious about that. If anything is going to be skimmed or raked, they make damn sure they are doing it.

        For instance, in my town, for my busness license, they base their business license fees on your gross revenue. Not your net income after expenses or taxes, but on every dollar that comes in. It is possible to be charged thousands for a business license while the business goes bankrupt. IE: I pay employess 1 million in wages (not so wierd if you are employing say 12 programming contractors on a project or twenty on two or three projects). I cover that in gross revenue but no more. The city charges me a percentage of the revenue so I loose x% of 1 million for my efforts.

        Orginized crime doesn't squeeze you like that. At least they are smart enough to know that putting you out of business doesn't get them more cash. Give me honest bribary any day over the monkey with a hand gernade that is our government.

        But to be fair I understand your point in wishing things were on the up and up. Unfortunately that is not a reality nor will it be in our life time. The smart play is to adapt and over come.
    • Sort of...

      They already support standards based formats. The problem is, most rival products don't support all of the functionality, or they implement it slightly differently.

      Opening a document in LibreOffice will move things about, even though both sides used a standard file format.

      The worst is PowerPoint to Presenter, I've had presentations where Presenter has moved lines in a process flow diagram to totally different parts of the process! Not good! The same goes in the other direction.

      We have the same issue with HTML/CSS. There is a standard, but each browser seems to interpret them slightly differently. It is getting better, but it still isn't perfect.

      I've had layouts, where it worked fined in IE, Firefox and Opera, but Chrome needed a CSS tweak to move one element 2 pixels up over the others and Safari needed a tweak to move that same element 1 pixel up!

      Dropping IE version 6 and 7 makes life a lot easier, but even just supporting the "modern" browsers isn't always a write-once-execute-anywhere experience.
      • The only REAL standards are set by end-users

        Vendors don't set standards because they seek competitive advantage by differentiating their products from products from other vendors.

        End-users (both consumers and enterprise customers) decide what product to use. Their buying choices set the "de facto" standards.
        M Wagner
        • correct

          And when I make the decision to not buy Microsoft Office, you have no right to whine that you cannot open the document I wrote in my proprietary word processing application, invented by corporation XYZ.

          Is this what you are proposing?

          On the other hands, if you hold on to the "de facto" standards, why all the whining about Apple's Touch Events not being available to Microsoft? Just stick to the "de facto" standard. Is this what you are proposing?
      • "The worst is PowerPoint to Presenter . . ."

        PowerPoint should die. The best use a time machine could be put to would be to go back and prevent PowerPoint's creation. I've been forced to sit through dozens, some hours long, and not one couldn't have been covered on two sides of a sheet of paper.
    • But it's not standard if it's...

      Wright_is has a good point.
      In radio comms, we have a nationwide standard, P25. One firm decided to include proprietary extensions -- and agencies who buy those systems can as a result only use radios made by that manufacturer, giving up legally required interoperability by doing so.
      When is a standard not a standard? When there's [redacted] on the label.
  • Quite simply, it all depends on what you want

    The same argument holds true in everything - If people are willing to pay for what you have, then you need not change that until they aren't.

    It's like saying "Is it time for Apple to change their product pricing to be in line with the rest of the PC/electronics industry?"

    Take a guess...
    William Farrel
  • Yes BUT ...

    "Let me preface my statements here by saying that I am not anti-Microsoft."
    I am against all the major corporations: they are too arrogant, greedy, deceitful, monopolistic ... for starters.

    "The solution, in my opinion, is a subscription model."
    Might be part of the solution ... but there are various other factors ...

    "Office 365 is an excellent example of what can happen with this type of software licensing."
    Disaster for me - I'm not going there. It used to cost me £85 for 3 licenses: now it's £67 pa. I don't have the freedom to choose when/if to upgrade.

    " ... a software subscription model is a win-win situation for Microsoft and businesses who purchase licenses."
    It is also an effective lock-in strategy :-(

    "Microsoft wins because software piracy will be minimal with subscription-based use."
    Why so ... if people didn't want to pay once before, they won't want to pay regularly in future!

    "One of the reasons software is so expensive is because of piracy."
    False. MSFT is doing just fine. It doesn't need any more money at all.Your whole argument about MSFT, APPP, AMZN, GOOG needing more money is complete an utter hogwash. They are extremely rich.

    "On the customer side of things, you'd pay a fee to use Visio per user, per month. Instead of spending thousands, tens of thousands or hundreds of thousands on software all at once, you'd spend a small, predictable amount for subscriptions every month or on an annual basis."
    Did you pass maths.? £85 once is less than £67 every 3 years or so.
    Ah, you're talking about businesses: where the cost of software is artifically even higher than for consumers!

    I accept all your points about a better delivery model for MSFT and customers.
    What all you ZDNET blogegrs seem to ignore is that MSFT is going to lock you into an expensive silo just like APPL.

    "So why hasn't Microsoft embraced this model?
    I don't know why."
    I do. MSFT, just like all the others, has to have complex restrictive licensing agrements to prevent customers exploiting the technology. MSFT must keep tight hold of the reins or customers will be able to make big reductions in their costs.

    Look at storage for example. RAID was invented in 1988 ... and we are only just seeing Storage Spaces in Windows 8 after the apalling WHS product. Why haven;t we had ZFS for years?

    And look at RDS licensing. MSFT have to keep it in check ... or else everyone would be able to use RDP instead of VDI.
    That is also why VMWARE have such appalling licensing arrangements. They have to in order to prevent customers taking the value. Its like they invented the internal combustion engine but want to charge bus manufacturers extra for making good use if it!

    The same will be true of all cloud pricing. Note that when big players design their own datacenters they design using commodity architectures: customers are forced to pay up bound by by massive technology and licensing restrictions.

    I'm hoping the big players will be ousted by innovative entrepreneurial new technologies owned by far less greedy individuals.
    • Piracy...

      You said ...

      "Microsoft wins because software piracy will be minimal with subscription-based use." Why so ... if people didn't want to pay once before, they won't want to pay regularly in future!

      This is true but...

      (1) "casual pirates" (consumer who install one license on multiple machines, often their friends machines) can legally install on up to 5 machines under Office 365 - so they win.

      (2) "professional pirates" (those who profit from piracy) no longer have access to pirated code - Microsoft has the opportunity to recover income otherwise paid to "pirates for profit".

      (3) Microsoft does not have to share its profits with retailers. Nor do they have to package and ship media to retailers or consumers.

      (4) Those who will not otherwise subscribe, can still use Microsoft Web Apps, or whatever they want from a number of free sources. Why should Microsoft incur added costs supporting people who just want to rip-them-off?
      M Wagner
      • Yeah but . . .

        Yeah, but once you start down that road, all your data is in a specific format controlled by one company. It's in their interest to increasingly lock up customer's data in more and more restrictive proprietary formats. Like Hotel California, ". . . you can never leave . . ."

        It isn't your data if you can't access it without paying someone for permission.

        And yes, I'm talking about Apple and Google as well.
  • Why not offer both?

    Offer a subscription for those that are attracted to that model. Offer a flat fee to those who want that model.

    Why alienate either group if you can have both.

    Lastly I'm not convinced that curbing piracy will result in lower prices.