[Am-info] beneficiary of the new program is Microsoft, not the custome

[Gene Gaines]

>From The New York Times Direct
Thursday, June 27, 2002

Software Subscriptions: A Bad Idea Whose Time Has Come
by David Pogue


  We all know the argument, but velow is an excerpt of a well
  stated summary of Microsoft's particularly disgusting
  subscription "innovation".

  I use the short summary of the article below as a "read and
  beware" piece for my friends who might not know better.
  
                                             -Gene Gaines

Quick quotes from the article:

In last week's "State of the Art" column, I reviewed OpenOffice
and StarOffice, two versions of the same software suite that's
designed to compete directly with Microsoft Office. I pointed out
that Microsoft itself opened the door to such challengers. As of
July 31, the company will no longer offer its corporate customers
steeply discounted upgrade packs when new versions of Windows or
Office come out. Instead, it offers them Software Assurance, a
plan in which corporations pay Microsoft an annual subscription
fee for these updates.

... this much I'm sure of: for companies that don't automatically
buy every new version of Windows and Office that comes down the
pike, the new program is a bad deal. The Gartner Group research
firm estimates that the new program will raise prices for these
companies between 33 and 107 percent.

Companies that sign up for Software Assurance are, in essence,
committing in advance to buying every upgrade -- without knowing
whether it will be any good, or even whether or not Microsoft
will, in fact, release any upgrades at all during the three-year
contract.

"In the old days, a company could buy one version of Office," a
Microsoft spokesperson told me. "They could run it for 50 years,
and then tell us, 'I want the newest version, and I want the
upgrade price.' For Microsoft, this income stream was uneven and
unpredictable."

On that we can agree: the beneficiary of the new program is
Microsoft, not the customer.

...

In Microsoft's case, first of all, it's an unbelievably
anti-competitive move. During the three years that companies are
locked into Microsoft's program, they certainly won't be buying or
even investigating products from Microsoft's rivals.

But the more important issue is this: once customers are locked in
to a prepaid subscription plan, what incentive does Microsoft have
to improve the software? Why should it bother? The money is
already in the bank, and the customers can't afford to go anywhere
else for three more years. Incredibly, Microsoft even makes a
point of warning us that its new Software Assurance program is not
a "technology guarantee." Translation: You might pay for three
years of coverage and not get any new versions at all.

... In fact, surveys by research firms Gartner and Giga
Information Group found that by the beginning of this month, only
one-third of Microsoft's corporate customers said they intended to
sign up for Software Assurance. (The others had either decided
specifically not to sign up, or were undecided.) This, despite the
fact that Microsoft pushed back the deadline twice, first from
October 2001 and then to February 2002.

At least nobody can complain that Microsoft doesn't innovate.
Software subscriptions are a new idea -- a terrible one. I wish it
the worst of luck."

   (I don't know where to get the article other than The New
   York Times email, but you might try the author's web site at
   www.DavidPogue.com.)


Gene Gaines
gene.gaines@gainesgroup.com
Sterling, Virginia  USA


 -- Viva Hon. Dr. Edgar David Villanueva Nuñez of Lima -----
 -- Congressman of the Republic of Perú, Apurimac District -
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