Influential IT users in the UK are putting pressure on the government to launch an inquiry into Microsoft's new licensing schemes. They allege the software giant is guilty of exploiting its dominant market position to force its customers to accept steep price increases.
Despite growing protest, Microsoft has insisted that the changes will go ahead, leading some IT managers to consider a ban on buying new Microsoft software.
The Infrastructure Forum (TIF), an industry special interest group whose 98 members have an annual IT spend of over £18 billion, has written to trade and industry secretary Patricia Hewitt asking for a full investigation into Microsoft's new licenses.
The forum believes that changes made to the company's pricing policy will cost UK businesses almost £1 billion over a typical four-year investment cycle.
Until the end of last week, firms could purchase upgrades at reduced price through either a two-year Upgrade Advantage contract, or by buying one of four common-version upgrades.
From today, both policies will be replaced by a scheme called Software Assurance, whereby only those businesses that regularly upgrade their software are entitled to a discount. Companies have until 28 February to sign up to the scheme.
Duncan Reid, licensing manager for Microsoft UK, strongly defended the initiative. "We have always recognized that the changes in licensing could provide a potential price increase over time for those companies that do not upgrade frequently. Thirty percent of them will see a decrease in fees, half will stay the same, while only 20 percent will see a rise," he said.
TIF chief executive David Roberts maintained that at a time of economic downturn, Microsoft was asking its customers to spend more. "On average, our members will see a 94 percent increase in licensing fees. How they could conceive such a scheme at such a time without foreseeing the knock-on effect to their customers beggars belief," he said.
Analysts said IT managers would have to consider their options. "People will have to work out which of Microsoft's licensing plans suits them best, and which will prove most economical in the long run," said Tony Lock of analyst group Bloor Research.
IT managers themselves said the new licensing scheme might put them off buying from Microsoft in future. "We have no budget to sign up for Microsoft's new scheme. I'm hoping to get a Linux server in the door and maybe we'll be able to say goodbye to Microsoft," said the IT manager of an international recruitment firm. Another said that if the schemes resulted in too much expense and inconvenience, his company would "think twice about Microsoft".
