Microsoft licensing value under scrutiny

Microsoft's Enterprise Agreement licensing deals are coming under close scrutiny by businesses questioning the value of the three-year contracts.

The costly Enterprise Agreements include free product updates and support over the three-year lifetime of the deals but the lack of new updates is forcing some organisations to consider alternative licensing arrangements.

At a recent workshop by blue-chip user group the Corporate IT Forum, some IT chiefs said Microsoft's Select Agreements are a far better deal for many organisations.

Despite this, two-thirds of silicon.com's 12-strong CIO Jury IT user panel with Microsoft licensing agreements said the contracts still offer good value for money.

Mark Beattie, head of IT for waste management company LondonWaste, said: "When we priced out the value of the Enterprise Agreement against the cost of individual upgrades, we found them almost the same. However, some of the extra services, like the home use offer to employees have been real winners for our staff. Flexible licensing has also reduced the headache of constantly having to load CDs and then keep the licences safe."

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Graham Yellowley, director of technology services for investment bank Mitsubishi UFJ Securities International, said: "We use the Microsoft Select Agreement. It is a three-year commitment and we have found that it provides flexibility to our needs."

But a third of the CIOs disagreed. Bill Ashworth, IT director for Countrywide Surveyors, said: "The only reason for upgrading to the latest products is loss of support. Recent new versions have very little tangible benefit."

Ian Campbell, CIO for British Energy and chairman of the Corporate IT Forum, said: "It would be great if we user organisations could collaborate to get some standardisation with licensing."

He said the rise of Google Apps is also an increasingly viable alternative to Microsoft licensing deals for some organisations.

Nicholas Bellenberg, IT director at publisher Hachette Filipacchi UK, said Microsoft licensing agreements don't offer value for money and warned others to scrutinise the terms of their deals closely.

He said: "I made the error of signing off purchase of Microsoft Office licences with Software Assurance, taking advantage of our corporate Select Agreement pricing. What I didn't realise was that Software Assurance is limited to the term of the Select Agreement. So we only had a year and a half of Software Assurance not the three years I had been led to expect."

This week's CIO Jury was…

Bill Ashworth, IT director, Countrywide Surveyors
Mark Beattie, head of IT, LondonWaste
Nicholas Bellenberg, IT director, Hachette Filipacchi UK
Ian Campbell, CIO, British Energy
Colin Cobain, group IT director, Tesco
Neil Harvey, head of IT and accommodation, Food Standards Agency
Adrian Hughes, head of IS, Amlin
Jacques Rene, CTO, Ascend
Richard Steel, CIO, London Borough of Newham
Richard Storey, head of IT, Guy's and St Thomas' NHS Foundation Trust
Steve Williams, head of ICT, Sunderland City Council
Graham Yellowley, director of technology services, Mitsubishi UFJ Securities International

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