[SATLUG] OT - microsoft pay as you go......................

Henry Pugsley henry.pugsley at gmail.com
Mon Dec 29 18:45:03 CST 2008

On Mon, Dec 29, 2008 at 5:16 PM, Sean I <siffland at nerdshack.com> wrote:
> http://arstechnica.com/news.ars/post/20081229-microsoft-patents-granular-approach-to-computer-leasing.html
> i dunno why it is so funny, yeah i cant do the math if it is more cost
> effective.  But i have to tell you, i have never really had a pay as
> you go service that was cheap.....
> Sean

It's called the price of convenience.  If you look at the M$ EA
licensing scheme, you pay $400 per computer per year to run Windows
XP, MS Office (basic), and Outlook.  Also included in this $400 is
software assurance, which allows you to upgrade to the next version of
the software in 1-3 years.  The really convenient part is that you
only have to maintain one copy of the media, and you can install it on
as many computers as you want, as long as you report the number of
copies you install every month.

If you go by retail pricing, you will spend about $800 every 3 years
on the same software licenses.  You will have to keep up with media
and licenses for however many computers you happen to have.  When you
want to upgrade your entire site to the next version of Windows or
Office, you have to spend a huge sum of cash all at once to do so.  At
the end of the day, the "pay as you go" EA licensing looks better on
the books and creates less of a headache for IT.

The downside is vendor lock-in.  They typically require a 3 year
commitment for such an agreement and there is a huge penalty for
getting out of it.  During that 3 year time period, no one in
management is going to want to hear about alternatives like Linux
because they have such a huge "investment" in Microsoft.  The griping
from accounting about the cost of the Microsoft licensing fees won't
start until about 2 years into the deal when you exceed your growth
projections and have to "true up" for a not-so-nominal fee. By this
point so much infrastructure is dependent on the platform that it
would be financial and political suicide to jump ship, so you may as
well just bend over and take it for another 3 years ..

I get the feeling that pay-as-you-go is a way to stick it to the
people who rarely or never upgrade .. both to ensure revenue and to
force upgrades (and thereby shorten the support lifetime).  I'm sure
there are still people out there using Windows 98, meaning that
Microsoft has missed the chance to sell them at least 2 major upgrades
of the OS.  But if you pick up a version of Windows that costs nearly
nothing on the front-end but you need to pay $0.80 for every hour you
browse the Internet, you are stuck forever.  And you may as well
upgrade to the new version when it comes out because you're stuck
paying for it anyway.  Kind of fitting that this is coming out just as
Microsoft is trying to kill off XP but can't because there is no
viable alternative for their users.


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