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Is MS really force-feeding customers upgrades? You bet!

David Coursey AnchorDesk

Published: 16 May 2001 15:08 BST

The good news for me is (but bad news for customers): I'm right, as were the previous news stories by Joe Wilcox. So far I've had two analysts, both briefed by Microsoft, tell me yesterday's column was spot on.

Another analyst said the issue was complex and he hadn't studied it -- putting him in the question mark column -- and I am still waiting for three callbacks.

Meanwhile, when I spoke with Bill Henningsgaard, Microsoft's vice president of worldwide licensing and pricing, he refused to dispute the basic thrust of the piece, which is that many corporate customers are facing the prospect of an unexpected upgrade expense -- potentially a large one -- to avoid having to pay full price for their next upgrades. (Read more of what he's said on this issue.)

But paying full fare might not be such a problem: The VP also disputed claims that the penalty for not upgrading could double a customer's software cost. The penalty, he says, will only be about 35 percent.

If the maintenance agreement Microsoft wants customers to purchase after the upgrade (before an October 1 deadline) costs 29 percent of the full software cost, and you put the money in the bank instead of giving it to Microsoft, you don't have to wait much more than a year to break even by not upgrading.

So, if many corporations are going to be faced with the prospect of buying upgrades for Microsoft apps, servers, and operating systems by October 1 or risk paying significantly more if they wait, what does it mean?