Microsoft's license price increase 'lose-lose' for enterprises, say analysts

Cashing in on BYOD by boosting 'user' CALs pricing by 15%

By , Computerworld |  Software, BYOD, Microsoft

"This will increase Microsoft's revenue," said Jeff Muscarella, a partner with Atlanta-based NPI, a firm that helps companies navigate technology purchasing and licensing. Muscarella declined to speculate on how much more it would bring to Microsoft's coffers, but in a report issued to its clients, NPI said it "could mean billions" to the Redmond, Wash. giant.

Others agreed. "I think this will raise more revenue for Microsoft," said Paul DeGroot, formerly an analyst with Directions on Microsoft, now a principal with Pica Communications, a consulting firm that specializes in deciphering Microsoft's licensing practices. "But while customers may not want to pay more, a 15% increase could be the lesser of two evils."

Many companies, DeGroot said, don't even realize that they are obligated to buy CALs to support non-PC devices. But if Microsoft audits a customer's licenses and find it's not bought enough, it can drop the hammer.

"If or when Microsoft comes in and starts asking how many devices in total are accessing Exchange email or using [Remote Desktop Services] sessions], it could get nasty," DeGroot said. "All those sent emails with the helpful signature 'sent from my iPad,' for example, are tip-offs to under-licensing."

Even with the 15% increase, experts like DeGroot continue to tell clients to switch to user CALs. As devices proliferate, they're still the better deal.

Microsoft justifies the higher prices by claiming it now offers increased support across multiple devices, said NPI's report. But not everyone agrees.

In an October blog post, Forrester Research analyst Mark Batrick took Microsoft to the woodshed. "When I only have one version of Windows and Office but wish to access that version remotely or virtually via multiple devices, why should I have to pay more for the privilege?" he asked. "I am still only accessing my one version of Office, albeit it from different devices at different times, but I have to pay more?!"

Some see Microsoft's emphasis on user CALs as part of a larger strategy to shift customers to subscription-based licensing.

"They've thought this out," said Ullman "They're aggressively pushing the cloud, and changing their licensing to cloud terms and conditions. They using the licensing push to get customers to join their cloud wagon, and once you're hooked, they'll want to move you to subscription-based licensing."


Originally published on Computerworld |  Click here to read the original story.
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