Technology Darwinism hits Microsoft's licensing policies
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 And that single device mentality is but one of the rubs against Microsoft's outdated licensing policies.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. Salesforce.com 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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