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Microsoft

New Microsoft Feature: Planned Obsolescence 356 356

Ryu2 writes: "According to this CNet story, Microsoft is thinking of from its current "perpetual" license scheme to a three-year contract for its enterprise customers, and most of its software. After the three years are up, customers have to pay up again or stop using the software. While the issue of subscriptions has come up before, this seems to imply that Microsoft is abandoning the traditional time-unlimited license altogether. With them setting the precendent, for good or for ill, for many things in the software industry, if this takes hold, how long will it be until every other business software firm jumps on this bandwagon?"
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New Microsoft Feature: Planned Obsolescence

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  • by Anonymous Coward
    Grammar Nazi, save us from the hideous sentance structure!
  • by Anonymous Coward
    This is actually commonplace in the EDA SW industry. In fact, I can't think of a single piece of software we use for chip design that is "buy once, run forever". This is the way things have been done for at least the last several years, probably a lot more.
  • The general computing public in my neighborhood routinely loans and borrows software back and forth, same as garden & workshop tools.

    I'm out of that cycle, since it's almost all Windows stuff getting swapped, but how the heck are Microsoft or Adobe going to keep people from being friendly, which is all the locals figure they're doing when they let a neighbor use their copy of whatever?

    - Robin
  • In 3 years, Linux and the various free projects will supposedly be ready to replace all of MS's software. So you can tell the salesperson, "Three years is fine; I'm planning to switch to Linux then anyway."

  • by crovira (10242) on Tuesday May 08, 2001 @04:58AM (#238355) Homepage
    The greedier and more visibly desperate M$ gets, the better the alternatives look.

    If you've got a lot of legacy hardware, Linux is the way to go. If not OS X may be your best bet.
  • It worked out well for CA as well.

    At a former employer, we used to use a couple of products that originally came from Digital but the package was sold to CA (during the Palmer fire sale regime). One package had it license fees shoot up by nearly 500%. We stopped using that package and a homegrown replacement found its way into use (wasn't as ``pretty'' though.) Another went to an annual license fee. Well, Y2K hit and the version we were running wasn't Y2K compliant. That was the excuse I needed to stop using that package too. After doing a little investigation it seems I could emulate the features that we actually used using a Perl script that took all of about 20 minutes to write. When will these companies learn that we're not in business to send them money; make a better product and we'll buy it.

    Where does Microsoft obtain all the guns it uses to shoot itself in the foot? And aren't their feet starting to look like Swiss cheese by now? Keep it up and you'll have the sort of customer loyalty that CA earned. (What did that old magazine review say about it? Oh yah: ``Dead last... with a bullet''.)
    --

  • ``The open source world can't even come close to providing real corporate applications such as CAD and structural analysis, and slews of other engineering apps.''

    I take it that by ``corporate applications'' you mean those that you spend too much money on or those that come in glossy boxes. You've, obviously, never heard of the NASA's COSMIC software library that used to be administered by the University of Georgia. For the cost of distribution, like the FSF, you could obtain applications of the sort you listed... with source code. UofG doesn't do the distribution any more but it's been taken over by Open Channel Software and can be found at http://www.openchannelfoundation.org/cosmic/ [openchanne...dation.org]. You can even ``adopt'' an application and get involved in the development of enhancements. Another potential source is the DECUS software archive [decus.org] (now called `Encompass'); there's a slew of software available. A lot of it's systems management related utilities but the semi-annual symposium collections used to contain a bunch of gems that we found useful. And I sure hope you know about the FTP archives on ibiblio [ibiblio.org]. Of course, if what one's really looking for in a ``corporate application'' is someone to sue, I suppose these won't fit their needs.

    I will agree with you that many commercial packages for UNIX cost more than they should. But to say imply that there aren't more cost effective solutions, and are open source to boot (no pun intended), is just naive.



    --

  • by Tim C (15259) on Tuesday May 08, 2001 @04:09AM (#238364)
    What do you mean, "new"?

    I think MS has enough of a track record of breaking compatibility between versions of eg Office, to justify viewing this as just the next logical step.

    Sure, at the moment we don't have to upgrade our version of Office - but new PCs come with the latest version, and our clients are using it, so we effectively do have to upgrade.

    Saying "I'm sorry, could you resend that as Word 95 format please?" isn't an option with some clients.

    Cheers,

    Tim
  • by Royster (16042) on Tuesday May 08, 2001 @06:25AM (#238367) Homepage
    Before PCs, software was licensed with an annual fee. IBM had elaborate price lists for all kinds of software you could add from sort programs to programming languages. Any companyies tended to buy the licenses.

    When PCs came along, (a) you couldn't trust the date on the computer because anyone could change it and (b) the users wouldn't put up with it.

    That didn't stop companies like SAS witha a big mainframe/Unix presence to have the same kind of licensing on PCs.

    In the Unix world, it was high software license fees that drove people to write free software. But there were still packages that use/used flexlm (one of the most common license managers) to have an annual fee licensing structure.

    Frankly, most people won't pay annual renewals. Maybe Office comes bundled with their PC. After a year, they get an email. Pay up or the software won't work. Most people don't use the Office that's bundled and they'll say "Screw this." and let it expire.

    Corporations are already amortizing their software cost over 3 years, so they'll compare the annual cost to the annual amortization and they'll probably pay. But they will install controls to make sure they don't pay for a single copy more than is needed.

    In the long run, annual licensing models help free software because people have an ongoing incentive to find a free package that meets their needs.
  • IANATA (I am not a tax attorney), but I read something on the desk of a tax attorney recently. I forget what jurisdiction this was in, but software was only considered an asset for taxation purposes if it was "operating software"
  • Big difference...

    Cars wear out. The gubbermint implements new emission and safety standards. Gas prices triple suddenly.

    But having said that, I've got to agree with you. :) I'd rather work on a '57 Chevy than anything newer...
  • I'm not surprised that M$ are planning to introduce planned obsolescence. But there's no need to bash M$ specifically over this. Other companies have been doing it for years.

    Consider:

    * Incandescent light globes/bulbs typically have a 1,000 hour lifetime. However, it is possible to make them last much longer. Most wear on incandescent globes happens when they are switched on and the current surges through it. If the initial current pulse was slowed, the globe would last much longer. This isn't done because the manufacturers would sell less globes and hence make less money.

    * Modern cars are designed with "crumple zones". These crumple zones are areas like the panels and the like. Repairing modern cars after an accident can be very expensive. Modern cars have been known to be written off after a collision in a car park at speeds under 20 km/h.

    * Most electronic equipment is built so that if it breaks down, the cost of repair is often greater than the cost of replacement. A lot of devices like VCR's have plastic gears and cogs. These limit the lifetime of the device and mandate regular replacement.

    * Old car batteries used to last 15 years or more. Now they are designed so they have a limited lifetime, typically 3 to 5 years.

    So why is M$ any different to any other corporation seeking to maximise profits by any legal means available?

    --
  • Much as I despise Microsoft, I feel obliged to "defend" them by pointing out that this is another one of their non-innovations. I worked in an all-VMS shop over a decade ago, and everything was on limited time licenses.

    The general scheme was
    price = product_base * machine_speed * number_of_users * how_long_do_you_want_it

    The only news regarding MS adopting the plan is -
    • a probable symptom of their cash flow problems (aka "market saturation")
    • they think they can start acting like the big kids now

    --
  • > No matter what the population here thinks, M$ will still keep the ajority of its (l)users. ostly because people are to ignorant to see that this suscription based software isn't worth it.

    What's happening there, boiscout? Did you forget to pay the rent on your m key?

    --
  • The funny thing is this....

    Microsoft was perfectly happy with their licensing scheme until this year. We pay site licensing (or whatever the MS speek is for it.) for our Windows and Office. We pay these yearly etc... This year, with no money in the budget for new PC's, employees, or anything else, we cut our site licensing agreement.

    The MS rep said "You can't do this!" and I said yes I can son, I own them there copies of Win2k. I'm sure we are not the only people to think of this...

    We are just now doing a site wide client migration to Win2k from Win95. You can laugh, but all of our vendors only support a Win95 client. (How will 3 year licensing affect this??)

    The truth of this is that solution providers will look for more stable clients to work with. And this will hurt Microsoft. Most of our providers are none too happy with Windows connectivity, DB access, stability, etc... Now tell them they have to re-certify their Client OS every 3 years, and then get all of their clients to upgrade, verify the server still works with the latest version.... Egad, what a nightmare.

    We have a 20 year old Sun OS 3.5 that made it past Y2K working with 6 year old clients. I also have a 5 year old Solaris system that we expect another 15 years of service from. A 12 year old AIX box, etc... Still running the OS they came with. Mircosoft might like to know that some of our machines still use DOS 6.2, BY DESIGN!

    With the new MS plan, I would have to upgrade all of these machines to use new hardware, new drivers, etc... What about support for legacy cards, like the Core Logix A/D to D/A converters?? Will Bill gates write me a driver??

    MR. Gates, that gun is pointing right at your foot...

    ~Hammy
  • by Kaa (21510) on Tuesday May 08, 2001 @05:26AM (#238384) Homepage
    The cost of software can be easily predicted

    How come? Unless MS gives you guarantees about pricing for many years down the road (highly unlikely) you have exactly the same predicting power.

    Buy: Pay a chunk now, amortize it over three years, do it again at unknown cost.

    Rent: Pay monthly over three years, do it again at unknown cost.

    they won't have to worry about deploying/managing updates and upgrades

    They do. First of all, they'll have to deal with security patches. Second, once three years are over and a new version comes in, who do you think will have to deal with data migration and untangling these little clever hacks that users wrote using the suddenly-not-supported-any-more features?

    Getting the latest (or any version) is going to cost $2500. Thats a big expenditure. Now, instead of paying for it all at once, maybe it'd be nice for them to pay $75/month for three years. That'd work out better for a huge majority of customers

    In one way, yes. It's always better to pay later than to pay early. In your scheme MS is basically giving everybody a three-year interest-free loan.

    On the other hand, the choice disappears: maybe after three years I am in a bad financial shape. Under the 'buy' model my operating costs for software are zero. Under the 'rent' model, my operating costs are determined by MS.

    Even if its more than that, say $100/month, its a deal for most customers

    It is? 100 x 36 = $3,600. You mean instead of paying $2,500 to use something forever I get to pay $3,600 to use exactly the same thing for 3 years and that's a good deal???!

    Thank you, I'll pass.

    Kaa
  • Companies do not pay that money up front (except in rare instances). They get a lease or lease-purchase on the software. The monthly payment for the three years is probably about the same, but at the end of the lease purchase, you pay 10% or $1 or whatever, and with M$, you pay whatever their new scheme is.

    (Forget MCSE's. How about a Microsoft Certified License Expert?)

    -George
  • Unfortunately, this is very short sighted. I agree with you on the quality of W2k.

    But, in about 3 years, Microsoft will stop supporting W2k. Any bug or hole that is found thereafter won't be patched. Thus, by then, you'll have two choices: live with a vulnerable OS, or switch to another OS, a newer version of windows most likely.

    Of course, all of these (expensive) migrations are an opportunity for open source products to move in. After all, if a (large) company decides not to support a product anymore, you can always do it yourself (being a large company). Might be cheaper than migrating to yet another version of software (be it an OS or an application)


    ----------------------------------------------
  • I just don't see how this is possibly going to work at this point.

    Places like my company have spent WAY too much money to buy site licenses to not have to worry about doing "subscriptions". Besides, I don't think the public is ready for rentable software.

    For the most part, if you ask any run of the mill Joe if he owns the software he bought, he's going to say "yes". The general computing public believes that they own the software they buy, just like other tangible items at the store. THey're not going to go for a fee that has to keep getting renewed. If Microsoft thinks that people are going to want to keep paying for the same software title over and over again, they're nuts.
  • Software rental is a bad idea for the same reason ASPs are a bad idea: you're giving up control of something fundamental to someone who has interests other than yours.

    Self-terminating software licenses (a category I'd argue is differetn than "software rental") are indeed a bad thing, but I don't think that ASP's necessarily are: ASPs have some different interests, but they also have a compelling interest in looking out for their clients' interests as well, if they plan to retain clients and be viable over the long haul.

    I've chosen to use ASP's for several critical business systems. ASPs are an extremely powerful tool for levelling the playing field for small companies which otherwise couldn't afford the purchase, much less the care and feeding of best-of-breed enterprise support systems. Careful selection of ASPs will include makin sure that you can always suck all your data out in some sort of reusable format whenever you want to. (Not all ASPs allow this, the better ones do, so caveat emptor...)

    Whether ASPs will take off for more ordinary uses is up for debate now, but for basic use, there are a few solutions out there that aren't too bad - I use thinkfree office as a virtual alternative where I don't have to worry about the config of any borrowed computer so long as it has an Internet connection and a Java-capable browser. (In fact, I think thinkfree is the best implementation I've seen of a Java-based office suite...)
  • Of course, if file formats werent arbitrarily changed all the time, supporting those older formats wouldnt _be_ a problem (or, heck, use PostScript. That worked in 89, and Im sure it works now). And if those helpdesk people werent forced to learn a new Office suite every year they woulnt have a problem with supporting the older versions.

    A company that decides it wants off the upgrade treadmill can cut costs and be more competetive. There has been no significant increased value for most companies in upgrading something like Office for the last 5 years, and without any increased value there is no solid buisness reason for upgrading.
  • Whatever happened to the old saying, "If it ain't broke, don't fix it." ? Why should a company who has a perfectly working system be -forced- to spend more money on not only the software, but on training, upgrading time, etc.?

    Just to bring out an example, that story on Slashdot a while back where the university's serve was left inside a wall for 4 or so years... It obviously worked flawlessly for that time (since they never even bothered to look for it), so why should they have to buy something new?
  • It's one thing to be forced to update your software to fix the company's mistakes, but it's a completely different thing to be forced to pay for an entirely new piece of software that may or may not add/remove things you want... (Imagine if people were forced to move from NT4 to 2000? That'd woulda caused havoc...)
  • i don't know why this comes as a surprise etc.
    to get the cheap per-seat pricing for education, you have pay a 2 year tithe, at the end of which you have to renew. at about $43 per seat, including licenses to access any back office application as well as for office pro, it's relatively affordable.
  • Sure, it'll never work for the home user, but that's not what they're aiming at.

    But therein lies the rub. If large companies are forced to use only the latest and greatest but smaller companies and home users can get away with using older versions, then how are the large software and hardware companies supposed to support their customers? If 40% of my customer base is using WinX but I'm only allowed to use WinX+1 then I'm pretty screwed.

    Then again, I'm sure I have nothing to worry about since M$ will always licence every legacy version I could ever want in MSDN and won't ever audit [theregister.co.uk] me for "misusing" MSDN.

  • If you read /. and manage Windows systems, I urge you to send mail to Microsoft on this issue. They need feedback, lots of it.

    Something of this form would do:
    To Whom It May Concern,

    It has come to my attention that Microsoft is planning to add an obsolescence feature to their software for enterprise customers. As a consumer of your software, and of other software which will almost certainly follow Microsoft's lead, I urge you to abandon this tactic as soon as possible.

    Please, understand that many companies such as ours will need to re-evaluate our software choices should this come to pass. We use and appreciate Microsoft's software, but cannot tollerate this level of demand from any vendor.

    Thank you for your time.


    That should get the right mix of reaction without setting off the loony alerts.

    If your company doesn't have a better address to send this to, try:
    Microsoft Corporation
    One Microsoft Way
    Redmond, WA 98052-6399
    USA

  • RedHat [sells] subscription based 'support services' which [comes] with, by the way, free software upgrades during the time of the subscription. I mean, is there a whole lot of differences? I don't think the question is will the business community take to this new idea, it's how have they accepted it so far?

    Well, let's see. MS wants to charge you a fee to get a 3-year license on the software, after which time you are not allowed to use it (it will probably stop working).

    Red Hat charges nothing for download of their OS, nothing for access to the updates and their OS keeps working as long as you don't use hardware that's newer than the OS, and even then many things will work.

    What you are refering to is Red Hat's RHN service which offers a convinient way to update your software through a GUI, an/or automatically update the software. They charge for this service, but they do not restrict access to the software or the raw updates at all. They also are still distributing updates for Red Hat 5.x which is 3 years old at this point.

    If MS stops supporting Win98, you're up the creek. No source, no updates, no nothin'.

  • Companies would like to get the latest software, but don't like shelling out huge amounts of money in unpredictable little bursts. If MS spreads the cost of Office (what, about $500 for a typical setup?) over three years, thats about $15/month per workstation.

    Except that the cost of the licence can be the least important thing. It costs money to change the software, to fix all the things that it broke, etc.
    But if you have to change you may as well well change to free software anyway.
  • Or 60% dont have time to upgrade. Managing your installed software base often is the biggest costs.

    More likely the costs of upgrading don't justify the expense. Which is considerably more than just the licences (for a payware product.)
    How many of the new features of Office 2000 actually benefit the average corporate user?
  • "What is to stop them from sitting on their backsides and doing nothing?"


    Competition? It may not exist now, but if they just sit on their asses, you can be sure that it will exist. Right now, they just more or less compete with theirself (their old versions of their own software). It's harder for them to sell a new version by saying that it's more stable than the old one - that's why they create more features, which is why Word has a toolbar the size of Texas.


    With subscription, they suddenly don't have to compete against their own old versions but only the competition. In my view, this means that feature work is no longer as high a priority as it was before. I could be wrong. :)

  • by macpeep (36699) on Tuesday May 08, 2001 @04:23AM (#238410)
    I don't agree. I think that companies of all sizes actually will LIKE subscription since it means they don't have to pay a huge sum up front but that the cost gets distributed over a longer time period. Remember that if Office costs $X now, it doesn't mean it will cost $X every year if the subscription plans happen but rather $X/5 or whatever, per year. Also, when there's a new version, upgrading is a non-issue cost-wise.

    A side effect could be that Microsoft actually starts putting more weight on improving quality rather than adding new features, since there's no need to "lure" old customers to buy the new version - they will still pay for the subscription regardless of what version they are using.

    For home users that would rather just pay once and then be done with it, I think subscription will be a bad thing. Someone might have money today and buy MS Office, but in three years, if they are unemployed, they won't be able to continue the subscription. That's a very bad thing.

    I think a one-time "unlimited" license should definitely still be an option, but as far as companies not liking subscriptions, I think you're wrong.
  • If a company wants to buy software, assuming they have nothing/or something old to start, they use this plan from MS. Instead of paying upfront, they just pay the montly maintenance fee. They pay this non-stop forever and they dont have to ever worry about not-having the latest version. Its a fair trade off, in my opinion.

    Yeah, until the NEXT time Microsoft changes the licensing scheme to suck more money out of its far-flung empire. Your assumption: "pay this non-stop forever and they dont have to ever worry..." in the context of Microsoft is a huge reach, IMO.
    --

  • by DzugZug (52149) on Tuesday May 08, 2001 @04:30AM (#238417) Journal
    Microsoft's old market strategy was to (arguably) improve their products so every three years or so you would have to upgrade to get the latest features, etc. Now they don't feel like reving old software anymore so they are just going to force you to buy a new copy of their software every three years or so.

  • We're in agreement on most points, but I'm gonna call you on this one:

    > Who uses software that's three years old anyway? I mean - at my company, Office 97 is almost impossible to find anymore. Users want the latest and greatest.

    Lemme get this straight - the secretary knocks on your door and says "I want Office 2000! Because Clippy is just soooo much cuter in 2000!"

    Where I work, the secretary says "Oh shit, you mean I have to learn Office all over again?", often followed by with "...and it'll make my computer run slower, won't it?"

    Wanna find out if your users really "want the latest and greatest?" Grab a nontechnical user who remembers working with Windows 3.1 in an office environment.

    Install Windows 3.1 and Office 4.2 on a modern PC (i.e., P166 or greater). Reboot. Sit the user in front of the PC. Type "win" from the DOS prompt. Windows will be up and running in less than 3 seconds.

    If the first word out of their mouth is anything other than "Wow!", I think I've made my point.

    (OK, my example breaks down because they also want a web browser, most likely IE4 or higher, and network connectivity. So they'll probably want their Win9x or NT box back after a few minutes. But I'll still bet the first word out of their mouth is "wow".)

  • In reality, ALL software and hardware is built around planned obsolescence. There will always be something better just around the corner and we even build our software with that in mind. What software developer doesn't say, "We'll put that in the next release." If they don't do that, they won't ever deliver anything.

    Now, as to Microsoft requiring business customers to pay again after 3 years seems kind of crappy. Decisions about what software to use should be in the customer's hands, not in the seller's. My guess is that this is a customer support based decision - i.e. they don't want to support legacy software products after 3-5 years. They've also probably based the 3 year rule on the fact that most businesses upgrade their software after 3 years anyway. It's just bull that they're not going to let the businesses decide for themselves when the best time for upgrading is. Can you imagine the uproar that's going to happen if everyone's 3-year contract happens to run out smack in the middle of a recession???

    Microsoft just seems to be digging itself deeper into a hole, causing people to look at alternate solutions. Either Gates has lost his business savvy or someone else is running the ship, cause this is just stupid.

    --

  • by joq (63625) on Tuesday May 08, 2001 @04:26AM (#238423) Homepage Journal

    scent = stinks
    cents = expensive
    sense = Migration

    Microsoft's moves are somewhat enigmatic these days, however they have a keen sense of how to make money off of fortune 500 companies who are willing to dish it out after "TRAPPING" themselves amidst an entire MS environment.

    Whats sad though, is at this point it would be extremely expensive for companies to switch their entire company (think big companies like Ernst & Young, Citibank, etc.) to switch over to something else overnight. Even if they were to do so, they would also have to determine what other OS to use, and hope it would still have MS support, since many of their clients are likely to prefer *.doc, *.lxs, etc., files, so even if a company were planning a switch it could take years to "plow the road" from the bumps.

    With newer companies starting up its a heck of a lot easier a task to do, and I'm sure many here see the recent changes with MS, so news like this is a plus for the Open Source community, who needs to lock down some standards for a change as well.

    Define a standard for corporations like a corporate Linux or BSD distribution which doesn't contain 2-3 cd's full of Window Managers, MP3 players, useless and non business related packages. What does 10 Windows Manager have to do with fulfilling the daily tasks of someone like a secretary, or clerical worker? Absolutely none.

    Make it a bit more GUI'er for unknowledgeable persons working with the OS.

    Raise the documentation standards on the OS. Make a GUI based help system unskilled operators could use instead of `man something` .

    Anyways enough swaying off topic many people (I hope) would understand the aura of where that was going. So will this affect sales of MS in the future? Probably minutely since many people like convenience, and are already trapped within an MS environment, and all this bickering amongst the BSD's/Linux users doesn't help, so for someone like a CEO looking in from the outside, they may see alternative OS' (Linux/BSD/other) as more of a problem than a solution.

    Create a business like standard for crying out loud. If NASA can send rockets to west bubble fuck, surely someone can create a "Linux/BSD for Incompetent Workers too Lazy or Dumb to Learn"


  • by mwalker (66677)
    Wonder if they'll have the software license run out based on variable conditions, like car warrantees. With cars, it's always something like 3 years or 30,000 miles... maybe with Windows it'll be 3 years or 3000 blue screens, whichever comes first.

    I know, I know, you're thinking "of course the 3000 blue screens will come first!". But remember, many users often can't turn their computer on, let alone open Word. Those who can, of course, will get their blue screen on schedule. But those users need to pay more often.

  • I understand why you don't like E,but personally, I think it's great. It's a PITA to configure some things because you have to edit config files, but most of it can actually be done with the menus now. I REALLY like the iconbox, I minimize windows constantly, and I find it much easier/quicker to glance and the iconbox and click on the window I want to bring up.

    As for sawfish, nothing you said about it was correct. All the behavior of the windows can easily be changed, you can easily set every action just how you want it.

    Please go buy a clue from someone who has one before you go ranting about these things. It really only takes 5 minutes to figure out how to configure sawfish and do it, if you can't even do that...

  • Look at the requirements for Windows 2000. They are a lot higher than Windows 98. Most people have computers that are more than 3 years old. MS better be making the new version compatible with hardware older than 1 year if they expect people to stay.
  • That's still not a valid comparison. No one is telling you that you can't drive your '57 Chevy any more. You didn't "license" the car, you bought it. If you're willing to put the time and money into it, you can drive that thing for as long as you want. The choice is yours, not anyone else's.

    Newer software and technologies come out, but these are not things that require you to upgrade. There are lots of people out there still using WordPerfect 5.1 for DOS. If your needs don't change, why should your software?
    --
    Lord Nimon

  • Boot your PHB's computer into BIOS, set the clock ahead three years, shut down... "This OS will self-destruct in 10 seconds"

  • Microsoft is losing money. Well, not really. Really Gates has so much money he wipes his butt with $100s. However, the company profit margins are not what they were 3-4 years ago. The primary reason is that people are not buying new computers. Windows ME and 2000 are not meeting sales expectations.

    In general, people are reasonably happy with Windows 98, Word, and IE. And a reasonably happy consumer is not going to give you more money.

    So enter reason one for subscriptipn service. A revenue stream. The Microsoft OS has matured, and regular upgrades are unnecessary. So Microsoft will force them on you, but making subscription services much less expensive than stand-alone software.

    Reason number two is that they will get to have an install disk or program on your computer every few years. This install program will comb your computer, find your default settings, and change all computers to using IE as the browser, and Windows Media Player as the Media Player, and make life very difficult if you want to use anything but MSN for an ISP. The more often Microsoft can override default settings, the more network traffic they will control.
  • by gargle (97883) on Tuesday May 08, 2001 @06:15AM (#238446) Homepage
    This is not a big deal for enterprise customers, because on accounting sheets, the standard practice is to use a 3 year depreciation period for software i.e. every year, you count 1/3 of the cost of software towards the cost of operations for that year - after 3 years, the software is considered "obsolete". Therefore MS's 3 year subscription model makes little difference to most enterprise customers as it merely makes a standard practice a legal requirement.

  • I just thought of something. If you are pirating their software, you haven't actually agreed to be audited on those machines that are pirating the software. I guess you shouldn't mix your shop, and should steal all the software so that you never enter into any auditing grey area.
  • by 4/3PI*R^3 (102276) on Tuesday May 08, 2001 @06:47AM (#238452)
    The software industry needs to be pushed by either customers or congress to accept one or the other. If software companies go to a subscription basis for their software then patents could make it so that certain "technology" is not available in any software currently on the market. If software companies want to patent/copyright their work then they should not be able to place time limits on the usage of the software.
    I'm not arguing for or against software patents or copyrights or subscription sales. I'm simply arguing that if software companies want to "force" customers into upgrades through "expired" licenses they should not be able to lock-up the technology and the software for decades.
    If Micro$oft doesn't think it can make money on Windows 3.1 anymore what have they got to loose with it going into the public domain? People will still upgrade their systems to the latest OS for the exact same reason that they upgrade their OS now. Those reasons (application availability, cool factor, technical support, etc.) will continue to exist even if the old version written over 10 years ago is in the public domain.
  • by dsginter (104154) on Tuesday May 08, 2001 @04:07AM (#238455)
    The OS is coming to a maturity and MS is going through a middle-aged crisis. With Win2K, there really isn't a *need* to upgrade anymore. Its stable and simple refinement is all that it needs. So now we are bound to see useless things like 3D GUIs and 3 year licenses.

    I think Win2k was the best and worst thing that ever happened to MS. Its a great OS and the end of their revenue stream. What happens when the market saturates with it? There only chance is to push XP as a subscription into the consumer markets where Win2K doesn't have a foothold yet.
  • Microsoft's dominance in the software arena is clear cut in many regards. However, don't overestimate their ability to introduce trends. For every one trend Microsoft has started, there are at least 10 failures. People point out that Microsoft is greedy, which is undeniably true (it's a company, what did you expect?), and then say this is proof it's going to push for this.

    Fact is, Microsoft is so greedy that it's entirely noncommital to all ideas: both the good and bad. It's such a profit-driven business that negative press has a discernable effect. Microsoft has backed off on a lot of things recently: the web-integrated desktop (_web_ and _desktop_, not _browser_ and _OS_, which MS did push for), excessive use of analogues for UI (MS Bob), cute little animated agents that pop up when you're trying to work (good riddance, Clippy), the list goes on and on and on. Simply put: Microsoft is not a trend-setter and it never has been. It follows trends and through whatever cunning tactics necessary (even those bad for the industry or against the law), ends up in domination.

    So don't overestimate Microsoft's ability to force users into anything. IMHO: Microsoft is an evil company. But the PR department still hasn't perfected mass hypnosis, so it keeps its ear tuned to the users. If Microsoft thinks users will reject this notion in favor of more traditional models, it won't make the move because then competitors can sneak into the cracks.

  • What's really funny is that these HS administrators are the same asses who always asked us: "Well if everybody jumps off of a bridge would you do so too?" No, of course not. But it seems the school system is perfectly willing to do so.

    The other funny thing is that they want to switch to MS now that Apple has a fully robust Unix architecture going for it. Seems like they are saying "Uh oh! Looks like the Apples aren't going to be crashing every other minute now, better move to Windows so as to preserve our pitifully low uptimes."

    Schools are weird places.

  • I think the spin to put on this is: with software rental, you don't control your data any more--Microsoft does. Once upon a time, you bought an application, created your documents or databases, and could use them happily ever after. Now, to get to your very own data, you have to keep paying. And paying. And paying.
  • One aspect of software rental that I haven't seen discussed (or maybe I've missed the discussion) relates to a major reason customers don't upgrade: incompatibility with their existing data, documents, other applications or whatever. The assumption behind subscriptions to software is that new versions are the same as old ones, only with additional features, support for new hardware and/or bug fixes. But the reality is that every upgrade involves a significant risk. Customers delay upgrades as long as they can, knowing that they'll end up having to upgrade a lot more than the one package. And worse, they may have to replace packages that work fine but aren't compatible with the newly upgraded package and are no longer being maintained.

    So imagine this scenario: three years from now your license to Win2k expires. And Microsoft don't want to give you a key to unlock it for a further three years; they want you to move to Win2k+3 so they can reduce their support burdens, lock you into a new set of ABIs or whatever. So you're forced to upgrade. And now you're faced with a hard deadline to upgrade everything, convert data from formats they or other software vendors have decided are passe and find replacements for apps that Microsoft has put out of business either intentionally or accidentally.

    Software rental is a bad idea for the same reason ASPs are a bad idea: you're giving up control of something fundamental to someone who has interests other than yours.

  • You're right, and Divx ;) is business model that consumers can really embrace!!
  • Saying "I'm sorry, could you resend that as Word 95 format please?" isn't an option with some clients.

    But you can say "I'm sorry, could you send me the source code for that format's reader please?" or "I'm sorry, could you resend that as plain text, HTML, LaTeX, or gzipped PostScript format please?" if you have made it clear to your clients that your company embraces (not in the MS sense) standards and not proprietary formats whose maintainers have threatened to sue you (countersuits on grounds of legal harassment are not common in the States) should you reverse-engineer them.

  • The OS is coming to a maturity and MS is going through a middle-aged crisis. With Win2K, there really isn't a *need* to upgrade anymore. Its stable and simple refinement is all that it needs. So now we are bound to see useless things like 3D GUIs and 3 year licenses.

    The automobile is coming to a maturity and GM is going through a mddle-aged crisis. With the '32 Chevy there really isn't a *need* to go any faster. It handles reasonably well and simple refinements are all that it needs. So we are bound to see useless things like tailfins and 3 year leases.

  • It does fit the auto industry model in this: in the 50's and 60's it was common for households to trade-in every three or four years for the latest model. In the 80's and 90's people started keeping their cars longer, so dealers weren't seeing the repeat business they used to.

    Answer? Start pushing three-to-four-year leases, where you end up turning over the car and keeping the dealer in dollars... Now MS can't talk people into upgrading (Good Enough Syndrome), people aren't replacing their PCs as often so the OEM cashflow is thinning, so what do they do? Move to a lease-based structure to keep the dollars flowing through.

  • by testy (138681) on Tuesday May 08, 2001 @04:26AM (#238492)
    For the most part, if you ask any run of the mill Joe if he owns the software he bought, he's going to say "yes". The general computing public believes that they own the software they buy, just like other tangible items at the store. THey're not going to go for a fee that has to keep getting renewed. If Microsoft thinks that people are going to want to keep paying for the same software title over and over again, they're nuts.

    Exactly. Does everyone remember Circuit City's Divx (not the codec, but the DVD competitor)? It failed miserably for this very reason. Many of the people who purchased Divx players were surprised to discover that they didn't actually own the discs that they had "bought." Circuit City claimed that they weren't able to secure adequate Hollywood support, but it was also quite clear that the consumers overwhelmingly rejected the business model.

    This software scheme isn't any different. As anyone who has suffered through providing tech support knows, users will continue to use software forever, or at least long after its useful life cycle. I know people who are still using Office 95, and one guy who is still trying to install Office 4.3 (for Windows 3.1) on his Win2K Pro machine. MS is in for a world of hurt if they're serious about this scheme.
  • never really understood why Word that came out in the win95 timeframe was never good enough to stick with. do you REALLY need office-2000?

    if some vendor pulled crap like this on me, I'd just revert to using the last version before the license change and when that stopped being useful, I'd dump the vendor entirely.

    how many people could NOT do their jobs if they had to use Word from the '95 era? sure, some of the file formats have changed, but if you ask the sender/author to save in '95 format, you're all set.

    if the vendors push TOO hard, customers will either push back (stop supporting the vendor) or just go full renegate and stop paying license fees altogether. a little greed is ok; too much and you'll get the opposite of your intended effect.

    --

  • by kfg (145172) on Tuesday May 08, 2001 @08:17AM (#238504)
    American businesses aren't taxed on assets, they are taxed on income. I'm not sure where you get the idea that it is otherwise. Perhaps you are confused by the popular misconception that there is an *inventory* tax? Inventory is not legally synonomous with asset. Inventory is an asset * specifically held for resale*. The expense on inventory is not deductable as an * expense* until the item is sold, thus making it APPEAR as if inventory were taxed. It isn't, of course. Purchasing inventory is deducted as an expense against income.

    Purchasing software is an *expense* and is therefore deductable against income. However, it is a *capital* expense and must be depreciated over a period of years.

    Leased items are an *operating* expense and may be deducted in their entirety in the year of the expendature.

    What's more even if your view of taxation were correct software STILL wouldn't be an asset. The value of an asset is what it could be SOLD for.

    What can you legally sell a used copy of MS Windows for? That's right boys and girls, you can't legally sell it at all, it has ZERO value!

    Money spent on software is, to the value of the company, roughly the same as money spent on toilet paper. It is money flushed down the hole that *reduces* the overall value of the company. That's why purchasing is so loath to get you that copy of " Really spiffy shit 2001" that you want so badly.

    Leasing software may increase profit in any given year by allowing the full deduction in that year.

    Am I going to lease software for my company? Not on your fscking life. I can obtain all the software I need for free.

    KFG


  • Next: State clearly that this is your corporate desktop prototype that will be ready in three month and will be replacing all M$ shit! Make it very clear that you where just waiting for them to set totally unreasonable conditions until it's worthwile to scrap M$ entirely.

    Wait for reasonable and cheaper offer from M$ to come in.

    Ah, now just sit back and wait until M$ sends in the audit team to destroy your company through fines and fees. Then I think you'll be needing the ol' Free Operating System, plus a cardboard box to live in. Microsoft's kind of disgusting that way, huh.

  • by Pendant (155221) on Tuesday May 08, 2001 @04:38AM (#238512) Homepage

    From the quoted CNET article:

    "Microsoft is finding it harder and harder to develop products that compel people to migrate," MacDonald said. "Microsoft built its market share because its products were good enough. But good enough isn't enough to get people to upgrade anymore."

    There is still at least one huge area in which the MS product range could be made better - usability. Instead of concentrating on new bells and whistles, MS would do well IMO to concentrate on fixing the multitude of I-wish-it-didn't-do-that "features".

    Perhaps then they might in the process convert people - like me - who are fed up to the back teeth of an OS that only has to be used because (almost) everyone else uses it.

    P.S. Typo in the subject line isn't mine ;)

  • IBM had exactly this problem with mainframes. Once they managed to dominate the market, they set about selling as many mainframes as they could. For a while, it was a growth industry. After a while, everyone who ever would buy a mainframe had one. Up until that point, IBM was making money selling hardware, and basically giving away the service and support aspect of their buisiness.

    Once they saturated the market, it wasn't possible to make a real profit on mainframes becase the market was actually shrinking. So, they deftly turned things around by putting the emphasis on the service side of the business. It turned out that IBM is still making a tidy profit on their Big Iron even though the industry is shrinking every year.

    Maybe Microsoft envisions the same thing happening to its Windows franchise, or at least the server aspect of it. They need to keep the revenue stream moving, so subscription-based licenses make sense for that. The real signs of trouble from Microsoft will be if they start going around saying that they want to stress "Customer Satisfaction" and start rolling out extensive service packages. I'd guess they would call them something weak like "Enterprise Premium Support" or some such managmenet-speak.

    --

  • Lets say your company purchases 100 licenses for "Office 2002" for a 3 year subscription.

    Two years later, Microsoft introduces "Office "2004".

    And a year after that, your licenses expire.

    Which will be in Microsoft's bests interests:
    A. Renew your licenses for $100 per seat
    B. Upgrade to the new product and get new licenses for $250 per seat

    There are a couple of ways Microsoft could "encourage" consumers to upgrade to new products:
    1. Make the renewal process slow, beaurocratic, and potentially painful.
    "You can only renew subcriptions during the renewal period, which is 10 days before your licenses expire. There will be a 60 to 90 days processing period. You must send the full payment in advance. Microsoft reserves the right to do a full software audit during the processing period. If we find you are out of compliance, you forfeit the entire resubscription fee..."

    2. Play games with the pricing structure.
    "Why renew Office 2002 for $249.50 when you can upgrade to Office 2004 for an extra fifty cents!"

    3. Change the rules in the middle of the game.
    "Microsoft will no longer support resubscriptions for products that have been upgraded"

  • by electricmonk (169355) on Tuesday May 08, 2001 @04:08AM (#238521) Homepage
    Shouldn't Microsoft take care of its problems with unplanned obsolescense before it starts planning it out?

  • It's not.

    But the cost of an "upgrade" from Office 97 used in 97 to Office 97 used in 2001 is currently free.

    It won't be under MS's new plan.

  • First, hopefully, the cost of such "upgrades" will be mitigated by this scheme. This might be a way for MS to get software out at more reasonable prices.

    Further, though, I'm not too concerned for a variety of reasons. I actually *do* upgrade most of my software every 3 years, and if you ask most Linux users, they probably will agree. I upgrade my Windows machine infrequently, but I upgrade my Linux distro perhaps every 1-1.5 years. And I'm certainly no longer running Windows 95 or even 98 if I can help it. Second, and more importantly, if you don't like the situation you can always continue to use your favorite, non time-expired OS. Get a copy of Windows 2000 when it reaches a rock-bottom price (it's actually suprisingly stable). Or, continue to get Linux distros that will never have this scheme.

    There will always be "another option" when it comes to time-limited software.

  • A company that decides it wants off the upgrade treadmill can cut costs and be more competetive

    This plan from MS would effictely get people off that treadmill - releases are more automatic, upgrades just ease in instead of having to shell out huge amounts of money for 1,000 licenses. Costs are planned, and can be evaluated easily.

    If a company wants to buy software, assuming they have nothing/or something old to start, they use this plan from MS. Instead of paying upfront, they just pay the montly maintenance fee. They pay this non-stop forever and they dont have to ever worry about not-having the latest version. Its a fair trade off, in my opinion.

    There has been no significant increased value for most companies in upgrading something like Office for the last 5 years, and without any increased value there is no solid buisness reason for upgrading.

    I dont agree here either. The people who switched to Office 2000, they do so for many reasons. I see lots of people using the group-document editing/handling features in Word 2000. Its a very popular feature. That alone, for places like law offices and technical writers seems to justify the cost of upgrading.

  • The typical case with leased software is a contract. It states typicall you get x software for y dollars for z years. MS would obviously have to support these contracts until they expired.

  • Interesting points, all good questions. As a software developer, it sounds like you wouldnt benefit much from this model.

    The people I imagined benefitting were non-tech people.. secrarties and law offices, professionals, support places. You're situations are all effictevely bad uses for subscription software. By-the-way, I am not convinced that MS is going to do this for all its products, so keep an out for that possibility.

    But its not just application providers who will like this. As I said, big enterprises will love this. Its much easier for a big company to pay $15/month for 10,000 machines than 5,000,000 up front for software. Plus, lets say the software sucks, and is buggy (real possibility) and they want out. Much easier to get out since they havent paid that $5M chunk.

    This is more a debate about leasing than about software. All the same idioms and issues regarding leasing vs buying apply here. For some people it makes sense, or others, it doesnt.
  • How come? Unless MS gives you guarantees about pricing for many years down the road (highly unlikely) you have exactly the same predicting power.
    Typically, you and the vendor sign a contract, and that contract typically includes a fixed price that cant move. So if you sign on for 3 years or 5 years, that is the price you pay. So that is a constant, wouldn't you agree? Yes, you can renegoiate later, and if you want, choose nto to sign up again.

    They do. First of all, they'll have to deal with security patches. Second, once three years are over and a new version comes in, who do you think will have to deal with data migration and untangling these little clever hacks that users wrote using the suddenly-not-supported-any-more features?
    Good point. This is always an issue with software upgrades. But the major hassle, co-ordinating a huge upgrade over hundreds or thousands of machines is eliminated at least in part by the subscription.

    On the other hand, the choice disappears: maybe after three years I am in a bad financial shape. Under the 'buy' model my operating costs for software are zero. Under the 'rent' model, my operating costs are determined by MS.
    Good point again, perhaps you are in bad shape - you are going to be hurting - but remember, after three years the costs don't suddenely require you to pay the whole purchase price for the new contract - just the monthly fee.

    It is? 100 x 36 = $3,600. You mean instead of paying $2,500 to use something forever I get to pay $3,600 to use exactly the same thing for 3 years and that's a good deal???!
    Yes, it is. For the same reason that people will pay $150k for a $125k house over the course of 30 years. Its a good deal because it is predicatble in nature, manageable, and affordable financially.

    You can pass, but many others will jump at the chance. Of course, for home users, this may be a bad deal. But for many places who use Office daily, it will be a big benefit, and a selling point.
  • Yes, I think the real reason most people are angry at the subscription idea is that it is going to seriously curb casual piracy, and even organized piracy.

    Very few people actually correctly license and own MS Office. We can debate the ills of non-free software, non-OSS software all day long, but you should at least stick to the rules. If MS wants to charge for products, thats their right. And people can choose yes or no to buy this stuff. All the sudden though, MS is getting proactive, and stepping up and trying to stop piracy.

    People who cant afford original software should use free software, or none at all.

  • It seems like M$ has been coming to terms with its inability to innovate for awhile. I can remember seeing some interview with Bill Gates where he says that M$ could go out of business in five years, this is how this industry works (shocking the talk show host). Maybe he was serious, I mean, what more can be done for office software? If they can't continue to sell upgrades because significant improvements have been made, they'll just have to lock customers into a pay me once, pay me twice, pay me three times model like this. Microsoft is funny because they seem to think that if they are not outright dominating everything about the computer, they are failing. I can't imagine any "common sense" businessman is going to be interested in paying for something more than once.

    An amazing number of business lease, rather than buy. It makes sound fiscal sense to lease at lot of the time. And sometimes its just dumb. It all depends on the case. Do the numbers, and they will tell you the situation and the correct choice. The same holds true for software. It all depends on the circumstance.
  • My impression from the articles are that this is not a subscription. It's the license expiring. You have the SAME PRODUCT for three years, then are forced to the next one at the end of the period, at full cost.

    Hmm.. that i didnt consider.. is it the SAME product as in Office, or is it the same product as in MS Office 2000 Rev 6.54321. That is an important distinction.
  • Yes it is, but so is the price you pay upfront to "own" software forever. You were claiming that renting software gives you *more* predictability -- well, no, it gives you exactly the same predictability as buying.

    No, I disagree. See, if you rent, then the idea is that you get upgrades included. So imagine you buy some software. Two weeks later, MS releases a new version. To stay up-to-date, you have upgrade again. Now, if you rented, you get that for the price of the rental, and the cost is absorbed automatically. You are protected from the unpredicatbility of the software release cycle.

    Okay, about the upgrades - I was assuming were lumping the .NET model of automated software delivery. Not with that included, you are correct.

    The amount I was mentioning was hypotethical.. but typically people pay a big premium for conveince. People pay $1.00 for a 1 liter bottle of pepsi at a corner store, when they could go to a wholesale club and buy 2 liters for $.99. Its all about convience, and percieved value.

    This will work for many customers. This won't work for everyone.
  • I don't think so.

    Believe it or not, I think many small/medium and even large size companies like the idea of subscriptions. The cost of software can be easily predicted, they won't have to worry about deploying/managing updates and upgrades, etc etc.

    About 40% of Office users use Office 2000. Microsoft would like to see higher adoption rates for the latest edition. Companies would like to get the latest software, but don't like shelling out huge amounts of money in unpredictable little bursts. If MS spreads the cost of Office (what, about $500 for a typical setup?) over three years, thats about $15/month per workstation.

    Many, many companies may enjoy - imagine they have five workstations. Getting the latest (or any version) is going to cost $2500. Thats a big expenditure. Now, instead of paying for it all at once, maybe it'd be nice for them to pay $75/month for three years. That'd work out better for a huge majority of customers. Even if its more than that, say $100/month, its a deal for most customers.

    So, the Linux/GNU model of course appeals to certain people, but I think this will make MS software more attractive for mainstream users, not less attractive.

  • Yeah, until the NEXT time Microsoft changes the licensing scheme to suck more money out of its far-flung empire. Your assumption: "pay this non-stop forever and they dont have to ever worry..." in the context of Microsoft is a huge reach, IMO.

    This is a good point. If ISPs are any indication, MS's plan will probably let them change the EULA (and price) with little-to-no warning and (naturally) leave subscribers with no recourse.

  • by Prior Restraint (179698) on Tuesday May 08, 2001 @04:47AM (#238547)

    Companies would like to get the latest software,...

    My experience has been that companies would rather standardize and leave it be. You mention 40% of businesses use Office 2k; that means that 60% don't want to upgrade.

    Now, instead of paying for it all at once, maybe it'd be nice for them to pay $75/month for three years.

    Nope. It's (to use your example) $75/month forever. Any company that decides it wants off the upgrade treadmill still has to continue paying.

  • by firewort (180062) on Tuesday May 08, 2001 @06:24AM (#238548)
    I'm not sure why MS thinks this will help them

    Just as much as their doing this encourages upgrading to current levels every 3 years, it gives me a chance to re-evaluate my needs and buy elsewhere.

    If Office costs $500 and I'm only using 20% of the features, I could decide to not pay the 500 every three years, and look elsewhere.

    Especially if Office isn't improving, only shifting the interface around, why should I sign up for the $1500 over three years plan?

    Even if other suites go to this (Corel, Lotus (yes, I still count Corel)) they'll be cheaper overall and just as functional.

    And if Star/OpenOffice improves in stability, speed, and compatibility, I'll be set anyways. (right now, star is unusable for me. too slow, and incompatible when saving to word with graphics in a document.)

    AbiWord doesn't do badly either, but it has a ways to go- I'd like to see all of the menus activated, for one thing.


    A host is a host from coast to coast, but no one uses a host that's close
  • I wonder how they are going to enforce this. at the retail level.

    The rental model is one thing, where you directly rent the software from MS.

    But if I go into a sotore and buy something, is it going to time out on me in three years? it going to give me an error screen 3 years after activation? I can imagine all kinds of horror stories on this. Handled with hard ball tactics, this could for less rational folks into violence etc.

    I for one, am glad I am getting up to speed on the *nix systems

    Check out the Vinny the Vampire [eplugz.com] comic strip

  • There are already numerous pieces of software out there that require a regular payment to keep it active. Alias|Wavefront Maya, Matlab, and Allegro Common Lisp all require regular upkeep (at least for the licenses I've seen). Newtek's Lightwave may begin offering an academic license that is renewed anually as well.

    While I personally steer clear of software with this kind of license (I tend to save up all of my pennies for a large one-time purchase) this is certainly nothing new.

  • by CaptainZapp (182233) on Tuesday May 08, 2001 @04:12AM (#238552) Homepage
    Prerequisites : You must be a fairly important M$Shop

    Bonus : If worst comes to worst you're even able to pull off your threat

    Setup: When the very junior M$ sales droid comes in delivering his blackma^H^H^H^H^H^H^Hsales pitch, get nasty, kick him out and make very, very clear that you won't negotiate with anybody less then the boss of his boss.

    In the meantime: Set up a really nice Linux box, focus on the desktop (enlightenment is nice), make sure that you can demo the whole range of Open Office apps; specifically conversions from M$ Office documents. Install the Opera browser and a few other nifty add ons, preferrably stuff that looks better then under Windows.

    Next: State clearly that this is your corporate desktop prototype that will be ready in three month and will be replacing all M$ shit! Make it very clear that you where just waiting for them to set totally unreasonable conditions until it's worthwile to scrap M$ entirely.

    Wait for reasonable and cheaper offer from M$ to come in.

  • by CaptainZapp (182233) on Tuesday May 08, 2001 @04:47AM (#238553) Homepage
    Ah, now just sit back and wait until M$ sends in the audit team to destroy your company through fines and fees. Then I think you'll be needing the ol' Free Operating System, plus a cardboard box to live in. Microsoft's kind of disgusting that way, huh.

    This might not quite work out. I know it happened and partially I wonder how companies, communities and schools could allow it to get that far.

    See, we do have contract laws here that require a certain amount of mutual fairness of the contract (Grundsatz von Treu und Glaube, in German). That is, if your license states something like M$ has the right to perform audits at it's discretion at any time and the licensee is obliged to have his full technical staff at their disposal for no charge this will never uphold in court. Probably most European countries will not accept EULAs at face value and click through licenses will be laughed out of court.

    Further: In the US they can destroy you simply by suing your ass away. The legal costs will kill you. In most European countries this won't work since the loser pays it all: Your lawyers, your legal costs, your additional effort and the court costs. It makes it much harder to blackmail you through the legal system.

    Of course it helps when you have your license paper work in order.

  • Honestly, The Phoenix office of Bechtel, the HR department where I work, still uses 95. They're considering upgrading to 2000 sometime in the next year or two... maybey... Meanwhile, they're gonna stick to 95, and the won't let us use anything else, period. So how would companies like this, that just don't give a damn, or even small companies that don't want to upgrade... why would they even want to THINK about upgrading that way? I mean... honestly, if I have a company that's working just fine running the systems they're running, why would i want to bother upgrading my software to something even more ludicrously bloated, potentially unstable, and gives a very good reason to have to shove out tons of money to upgrade the internet connections? Then again, that's a good idea. Someone convince Bechtel to upgrade to XP and upgrade the internet connectivity for the Phoenix office. Currently we run through the most ugly firewall/proxy/run to another city setup. Yeah, in other words, I type a character, it goes from Phoenix, to San Francisco, to the rest of the net through who knows what size dsl connection (yeah, dsl) thus giving every phoenix user an average speed of 1.2k/sec... speedy like 14.4! So, if I were smart and I wanted to not spend much money, I wouldn't ever ever upgrade to that version of windows. What if Apple stays at the single-buy license system like they are now? I'd be inclined to stick with that company a bit more. From a business-minded standpoint, I'd also like to see Apple get OS/X running on x86 machines, simply to smoosh Microsoft.
  • Don't forget that bussinesses do not want to own anything. If they lease items, then they don't have to pay taxes on it as an asset. That's why many companies lease computers for 3 years and at the end they are offered the chance to purchase the computer for $1. That's how SGI and IBM did it at the old CAD firm that I worked for.

    MS is leasing software so that companies don't have to claim it as an asset, hence they don't pay as many taxes. Leased assets are even a tax deduction in most places.

    I'm sure somebody who knows more about this will step in and correct me if I'm wrong. I welcome that.

  • by onion2k (203094) on Tuesday May 08, 2001 @04:10AM (#238576) Homepage
    Why should I have to pay for software twice, eh?

    Well..

    A quick run down of the software I'm using at the moment has shown me that all of it is under 3 years old, with the exception of a couple of NT servers. The idea that people will have to carry on paying for software years after they've bought it isn't new (Ask any Sun/SGI/Oracle user). This sort of thing pushes people into paying more money for software, true, but it also means they're considerably more likely to use more up-to-date versions, have less support/maintainance issues, and generally be happier.

    Sure, it'll never work for the home user, but that's not what they're aiming at.
  • by abdulwahid (214915) on Tuesday May 08, 2001 @05:37AM (#238586) Homepage

    I think you have hit the nail on the head. I am sure that removing the ability to pirate software will bring down Microsoft. Here in the UK I have often been to offices and tried to fix a network problem, asked the guys in the office if they have a Windows 98 machine to be told, "no, but I think we have a Windows 95 CD somewhere." You then realise they are illegally running 20-30 machines in their office. This is just so common.

    If people can no longer pirate the software so easily then people will seek alternatives. Whats more, non-Western countries will be even harder hit. I have been to may countries in Asia and the Middle East where it is very difficult to buy orignals. I once went into a computer shop in Pakistan whilst on a contract there. I asked them for a Windows 98 CD and they came with a pirate. I asked them for an original and they said they don't sell the originals.

    In short, people just can't afford to pay for original software. I am sure everyone out their has copied some software illegally at some point.

  • The general computing public believes that they own the software they buy, just like other tangible items at the store.

    The general public believes in all kinds of fairy tales.

  • In the enterprise world, this has been the pricing model for a long time. Most large software applications and sometimes even hardware (IBM, Digital etc) cannot be bought, only rented. Some call it license fee, but you still pay it every year so it's basically rent. In addition to this, the vendor charge you for support.

    The reason for this is of course that with software it doesn't cost you more to build 1,000,000 instances than the first one. But you still want a steady and predictable revenue for years to come. SAP, Oracle, Siebel, everyone charges this way. Also, customer seem to prefer this way, since it makes their initial investment smaller.

    When it comes to pulling the plug after 3 years, this also is the case with enterprise software. It is called "de-supporting", which means that the customer needs to upgrade to a newer version (for a fee) in order to receive the support he's paying for. Typically vendors support their product 3 versions back, and come with a major release every 2 years or so.

    What MS is doing is just moving their price model to the one that the major players on the large systems market are using. They can probably get the companies to pay for this, since most companies write off and replace their PC every 3 years. When it comes to people using PCs at home, I guess it'll be tougher, but perhaps MS figures people switch their system about that often.

  • What do you mean it won't work? This is just a formal proposal to do what they allready do. Every few years release a new version of Windows or Office, and encourage everyone to upgrade.

    Granted with Windows 2000 everyone really should, unless you can go to Linux or some other Open Unix. Office is another story. Nothing really useful except a more usable Outlook came out Office development in the upgrade from 95 to 97 or 2000. (Unless you consider office assistant useful...)

    So now, Office XP is here, and Windows XP is on the way. Three years down the road, Windows and Office 2000 will be a distant memory, and Windows LC (Lame Codename) will be on the way.

    So this plan is only different in that it is forcing you to upgrade, which they do anyway by getting the latest and greatest in schools and large coperations. Then everyone has to upgrade to be 100% compatible...
  • I really wonder if this move will change anything. I imagine most IT managers upgrade their software at least once every three years- in that case, it won't cost them any more, and for those locked into a Microsoft-centric environment there aren't likely to be many other options anyway.

    As for home users, who really reads their license agreements? Unless Microsoft makes this really vocal (and if they do, it'll be a 'feature') I doubt it'll change how the average user buys software, either.
  • From the article: "Microsoft is finding it harder and harder to develop products that compel people to migrate," and that is exactly the reason. They just could not come up with a new feature set for Office every two or three year and, damn, I could understand this - I do not have enough imagination either. Isn't this a great problem of software buiseness as a whole - there are only limited number of general task to be solved for general customer and after some stage existing solutions are good enough for most of the people? No need for anything new for general customers? Well, on the other hand, closes of the last century is more or less as good as contemporary ones, but haute couture and designers are still there... Wait for new spring collection from Gates! Crio
  • It seems like M$ has been coming to terms with its inability to innovate for awhile. I can remember seeing some interview with Bill Gates where he says that M$ could go out of business in five years, this is how this industry works (shocking the talk show host). Maybe he was serious, I mean, what more can be done for office software? If they can't continue to sell upgrades because significant improvements have been made, they'll just have to lock customers into a pay me once, pay me twice, pay me three times model like this.

    Microsoft is funny because they seem to think that if they are not outright dominating everything about the computer, they are failing. I can't imagine any "common sense" businessman is going to be interested in paying for something more than once.

    But look at all the new bloat Microsoft can add! They can make Office actually save in universal documented free formats!They can stop the stupid system from crashing over obvious bugs which have been in place for years! They can make it more useful for the average user!

    But since that will never happen, expect all sorts of crap to be added to "justify" every hick and his inbred cousin to use the product. Or most likely, "New from Microsoft Innovation Labs - The 3D DirectX Helpful Paperclip! Now with a more enthusiastic Gilbert Godfrey voice! In fact, you'll have to use the Talking Paperclip to input each and every letter and our helpful Paperclip will explain where each and every key on your keyboard is along with our delightful pop-up full-motion 1280 x 1024 animation windows!"

    Can we start an EBAY bounty for the head of Bill Gates yet? It'd be like a raffle. Buy tickets, donate to the bounty hunter fund, and decapitate Bill Gates. The bounty hunter that brings back the head wins the money and the raffle winner gets the head of the most unethical computer billionaire next to Steve Jobs.

  • I realize /. readers are, in general, pretty pc-centric, but the idea of renewing licenses after a period is hardly new. Take a look at the EDA market, for example. Almost ALL of the software uses this type of licensing scheme.

    I work at a company doing IC design, and basically all of our tools use this model. Some sample tools/companies: HSpice (Avant!), Powermill (Synopsys), Calibre (Mentor Graphics), VSS (Synopsys), HSim (Nassda), Virtuoso (Cadence), etc, etc. Everyone uses this scheme. Most of our software has to be renewed every year (and for a much larger fee than MS charges for Windows/Office/etc, I might add).

    For the average medium-to-large business, this really is not a big deal. Where this change might be more of a problem is the smaller, mom and pop businesses, who can barely afford the software once. But after three years, it's really time to upgrade anyway.

    Anyway, the point is look beyond the PC market and you'll see that this concept has been in use for many years. PC users are just used to getting things cheap. Not that MS products are cheap (in fact, I'd say they're disgustingly overpriced), but in the business world, subscriptions aren't a big deal.

  • by tantrum (261762) on Tuesday May 08, 2001 @04:09AM (#238621)


    during a computer crash your soundcard detected the words "Damn microsoft". This is not allowed by the contract you have signed with microsoft. This seems like a great violation of the license, and Microsoft is forced to take action.

    Your agreement with microsoft has hereby been cancelled. You are allowed to use this software for another month, after that time it will self destruct.


    We hope that you in the future will help us promoting the wonderful world of Microsoft programs, and not ever again curse windows for crashing.

    You might apply for a new contract after 12 months
  • Enterprise = corporate users

    Home users won't have to worry -- Microsoft would never give another company an in via home use. Requiring home users to re-subscribe would invite competition for Office Suite products that weren't subscription, and they would win over MS and MS knows it. Win at home, and then win at work.

    Therefore, we may conclude with mathematical certitude that Microsoft will not be applying this to home machines.

  • Not only will this move by Microsoft force I.T managers to rethink their budgeting plans.... at most companies, like it or not, the attitude is :

    "well, just make a few copies of [Microsoft Product] and install it .... then do a software audit and we will license the products before the Business Software Allaince comes and raids us....but don't bother buying the licenses at first - just copy the software and install it..."

    Yes, that's illegal, but in reality that's what happens at 9/10 companies...companies aren't organized and they need flexibility in this area...I think if Microsoft tries and forces this draconian licensing system on them, they will end up with customers that are taking a closer look at the alternatives...
  • by SpeelingChekka (314128) on Tuesday May 08, 2001 @05:25AM (#238640) Homepage

    As someone who works in a small business, I must disagree with you - I think that subscriptions are more likely to appeal to large companies. The reason is, in a small company (ours at any rate), a lot of the software that gets used is only used fairly intermittently - sometimes a piece of software only needs to be "pulled off the shelf" maybe once or twice a year. For example, we developed a Windows CE application for a client. That requires the Windows CE toolkit. The project has long since been delivered, but needs the odd bit of maintenance maybe once or twice a year for a day or two. This may be even less frequent in the years to come. Subscription would be deadly. Do we keep subscribed and pay continually for software we essentially don't use, just because we once in a while need to fix some tiny bug? What if we don't need to use the software for the next five years, but then suddenly need to? Do we resubscribe if we've unsubscribed? Chances are the version we used won't even be compatible anymore. Right now its easy - I have a hard disk with the toolkit installed and when I need to do maintenance, I just plug it in and go. Under subscription, I would most likely have to download the new version, and spend days (possibly weeks) trying to just get my project to compile.

    A lot of other software is also used far more sporadically than it would be in a large company. We have a legit copy of Adobe photoshop, for example, for doing the company web page. But we only update the company web page two or three times a year maybe. The rest of the time the software is not being used. Should we pay every month we don't use it? What if we stop our subscription for some reason, but need to open the .psd files six months later for some reason? At least with "owned" software, you just reinstall the software and open the documents, no problem.

    What if I have some personal documents saved in some format, but don't actively use the software anymore? What if I want to open those documents ten years from now? Do I shell out for a new subscription? I'm sure most of us have documents backed up on CDs from years ago for software we don't really use anymore.

    Lets face it, the only groups who will find the subscription model appealing are the application providers. They are the only ones who will greatly benefit from the model, and the only reason they'll be able to push it on people in the medium term is that currently the software industry is controlled by the vendors, not the clients, i.e. "what Microsoft says, goes".

  • Or 60% dont have time to upgrade. Managing your installed software base often is the biggest costs.
  • In the Enterprise world, I'm currently faced with searching for a "sales force automation" tool. I've researched about 30 different providers, and the ones that offer a truly Enterprise level software package all seem to be selling them with yearly renewable licenses.... nothing more, nothing less. They are guaranteeing upgrades at least every 12 months, and free phone support for 10 hours a month in general, some more... some less. Most ASP's operate this way as well. Something I remember being offered by one provider was the option to purchase the source code for 4 times the yeary operating license fee, if the company goes out of business... Anyone thing Microsoft will offer this?
  • In order to access your data, created with Windows applications, you need Mirosoft Windows. These kinds of licensing schemes are holding customers hostage: if you want to be able to get at your data beyond three years, you better pay up.

    I think sooner or later, people are going to figure out that this is a bad deal. And that's good for Linux.

  • Instead of just trying to convince you to upgrade to the latest and greatest every three years, now they're trying to force you legally. Beyond that, I don't see anything new here that they aren't already doing.

    The big question is whether important customers will sign on to this (especially in the light of an expanding Linux base), go to the competition, or just keep on using the older versions that let them do what they will.

    I remember way back when in the early 90's, when OEM liscences weren't tied to a particular machine... and we didn't even have these new-fangled 28.8 modems, either!

  • No matter what the population here thinks, M$ will still keep the ajority of its (l)users. ostly because people are to ignorant to see that this suscription based software isn't worth it. They will say, well everyone else is using it. why shouldn't I? My HS is currently having the same debate, the Adinistration wants to switch from Mac's to Windows, but the Sys Admin's want to stay with Apple. The School Admin's arguments are that "Well everyone else uses windows." It's a never ending battle and wether you like it or not, M$ will come out of it. Maybe with a few less customers, but this isn't going to hurt them.

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