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June 17, 2001 - Can Microsoft classify its OS as a Service?

I've been watching Microsoft's software licensing scheme evolve with sick fascination for a while now. It has actually started to look like a nasty car accident if you ask me. Microsoft has been looking for a sustainable profit model for a while now, and I think they've finally found it.

When Microsoft unveiled Windows 95, the "95" was a obvious move in the direction of software as a continuing renewal process. Microsoft had hoped that a yearly issue of their O/S would be snapped up by users who wanted "the newest and best" from Microsoft. That was true with Win95 and Windows NT 3.5. But except for those O/S releases, Microsoft has not given their software enough "bang for the buck". Nothing has really fundamentally changed in the 9x line of O/Ses since Win95 and in the NT line since NT 3.51. Even Windows ME, with it's dropping of real-mode booting, has not really changed anything in any spectacular way. Windows 2000 is a nice O/S, but it doesn't have an upgrade path for ME users, and it is not as stable as Windows NT 3.51 OR 4.0-and with a $300 minimum price tag, it's awfully hard for businesses to swallow, much less a home user who is going to have to upgrade old win16 applications in the process of upgrading.

Now, with XP, Microsoft is hoping to change their pricing model to one of the service industry. Now, honestly that wouldn't bother me if Microsoft really treated their O/S as a service. But they don't. A service is something that is not only maintained, but is reliable and immediately responsible for any issue that needs to be corrected. A service is something that you get constantly, in the form of staffing and support. Microsoft is hardly a company to follow through on anything, much less customer service. Microsoft has always been about profitability and the domination of its industry, and will never give the level of focus needed to make a service-type licensing agreement for a consumer level O/S reasonable.

Outside of the basics, I can't see anyone paying even 20% of the yearly cost of an O/S to be eligible for the privilege of upgrading their O/S. The average home user could care less about the latest and greatest. Heck, even most of the hard core users out there just upgrade systems instead of O/Ses. But then again, this whole licensing initiative isn't aimed at us. It's aimed at businesses.

Businesses have deep pockets (in Microsoft's opinion) and should be drained of all possible cash. Since businesses cannot afford the legal hassles of licensing issues, they will just pony up the dough whenever Microsoft demands it, since they're all trapped into the O/S at this point. So Microsoft has found a way to pull cash out of companies that were unwilling to upgrade to a new O/S on older systems just because Microsoft released a .x release of an operating system. The same can be said of Office (which is actually Microsoft's cash cow anyway). Microsoft believes that any single change to any software should be paid for as if it was a major release of their software. Businesses don't work that way. Businesses have to roll said software on to tens if not thousands of systems, many of them varying wildly in specifications and capability. Businesses need to support the software they run on their systems, and often cannot afford the learning curve in IS and on the floor--and cannot afford the problems and failures that always happen when new software is rolled out.

Honestly, I hope Microsoft falls on their sword on this one. Their products can be nice, but no company has the right to tell me when I'm going to upgrade my software. I doubt many companies are going to sign up for this new license abomination, and more power to them.