News

Opinion: Recent Record Shows We Can Take Allchin at His Word

• By Scott Bekker
• 08/28/2003

The comment came during a Q&A with Computerworld that ran this week. Allchin was referring to a question about Licensing 6.0's Software Assurance, where customers pay an annual fee with the expectation that there will be a new release of software during the three-year timeframe of their contracts.

Longhorn, the follow-on to Windows XP, is currently scheduled to come out in 2005. Windows XP came out in 2001, and recently a Microsoft analyst made hay with a prediction that Microsoft probably wouldn't be able to deliver the operating system before 2006. Allchin, reverting to form, emphasized quality as the main driver for Windows releases and therefore declined to rule out a 2006 ship date for quality reasons.

With Software Assurance, customers are paying the equivalent of 29 percent of the cost of their desktop operating systems each year to guarantee that they'll have access to the next upgrade. Of course, if that upgrade doesn't arrive during the three-year life of a Software Assurance deal, customers have almost paid twice for one version of the software.

While Allchin refused to be pinned down on specifics of what doing right by customers would mean, Microsoft's recent record indicates that the company deserves the benefit of the doubt.

Microsoft made a huge miscalculation in pushing Licensing 6.0 and its Software Assurance program onto customers in mid-2002. Trying to introduce the program through most of 2001 and finally locking it in place in August 2002, generated extreme ill-will with customers. That's lead to a fair amount of mistrust of the company.

But Microsoft knows it made a huge mistake with Software Assurance, acknowledging that the program was incompletely thought out, poorly explained and lacking in value. Since then Microsoft has added value to the Software Assurance program including free online and telephone product support, employee home-use rights for Office and other enhancements.

Microsoft's recent actions on its new support policy, which was immediately much more popular than Licensing 6.0, have shown equal flexibility when it counts. Although the policy specifies that mainstream support for business products ends five years after initial availability, and that customers have to buy extended support contracts for the sixth and seventh year of a product lifecycle, Microsoft has already made two key concessions. In January, Microsoft waived all extended support fees for Windows NT 4.0 Server and delayed the product's end of life from Dec. 31, 2003 to Dec. 31, 2004. Earlier this week, Microsoft made a similar move for Exchange 5.5 Server, waiving fees for the first year of extended support, essentially extending the mainstream support deadline from Dec. 31 of this year to Dec. 31, 2004.

Obviously things can change. Much of Microsoft's good record on flexibility has come in the last year. Microsoft could start heading down the wrong path again before 2005, and a lot is at stake. Companies worldwide have paid a lot for Software Assurance contracts that will have proven to be nearly worthless if no client upgrade is delivered in time. But for now we have Allchin's word that Microsoft will "do right", and that commitment is backed up by a fairly solid trend of reasonable concessions from Redmond. So relax, but keep an eye on this.