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Gartner: Microsoft Uses Windows License Compliance Confusion to Drive New Revenue

Aug 13, 2000, 04:59 (22 Talkback[s])
(Other stories by A. Bona, N. MacDonald)

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"Recent discussions with Gartner clients indicate that Microsoft's sales force has begun using an internal question-and-answer document on licensing issues to pressure enterprises to consider purchasing operating system (OS) upgrade protection for all workstations. The justification is that without upgrade protection, enterprises are not permitted to reimage workstations using media provided through the Microsoft Select program, from Microsoft worldwide fulfillment or commercially purchased copies of Windows -- even if the workstation is reimaged with exactly the same version of Windows as delivered by the OEM."

"Microsoft is benefiting from confusion related to this issue to increase revenue from upgrade licenses during contract negotiations. By encouraging the purchase of a UA ($157) or VUP ($117 to $121) license for all OEM desktops reimaged, Microsoft has effectively doubled the licensing cost for Windows. For example: An enterprise that purchases 5,000 PCs from Hewlett-Packard (HP) with HP's OEM version of Windows 2000. The enterprise receives the PCs, and reformats and installs their custom image created using Select media. Microsoft will require that the enterprise pay an additional $117 to $157 per desktop -- or $585,000 to $758,000 -- for the right to install the same version of the OS that it paid the OEM for."

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