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July 10, 2006

Microsoft asset management program riles customers

Posted by David Hunter at 10:31 PM ET.

Carol Sliwa reports at Computerworld on a Microsoft sales campaign that’s straining relations with some business customers:

During the past year, Microsoft has approached some 1,200 U.S.-based corporate customers it suspects may not be licensed properly, based on the data mining of its volume-purchase history records, according to Juan Fernando Rivera, the software maker’s director of worldwide software asset management.

But Rivera swears that license compliance wasn’t the driving factor and audits won’t be forthcoming, even though Microsoft often suggests potential license problems in its initial customer contact. Instead, Microsoft is trying to persuade those customers to participate in its Software Asset Management (SAM) program, which kicked off two years ago in the U.K. and launched a year ago in the U.S.

Under the program, Microsoft pays for its consulting partners to educate customers on the merits of asset management, help inventory their installed software, compare the inventory with license documentation, and make recommendations on policies and procedures. In the end, the customers get a chance to pay for unlicensed software, or “true up,” without penalty.

So far, 570 U.S.-based companies either have completed a free SAM engagement or are in the process of doing so with a Microsoft partner — 132 of which have attained SAM certification since it became available in November, according to Microsoft. The software maker plans to spotlight the SAM program this week in Boston at its annual Worldwide Partner Conference, as it works to scale the model during the coming year, Rivera said.

It doesn’t sounds that onerous, but there are some glitches:

A Computerworld investigation involving 51 companies — including 14 that Microsoft contacted about the SAM program — showed that many U.S.-based IT managers were confused, distrustful or downright angry after their companies had been accused of potential licensing problems in connection with pitches from Microsoft SAM representatives. In some cases, they later learned that the pitches were based on Microsoft’s admittedly incomplete records.

Basically, Microsoft can only really track licenses obtained through their volume purchase programs and if your company is buying through some other mechanism, you may unwittingly show up on the radar screen and become a target for Microsoft “pressure” as the examples quoted illustrate. Nothing like building good will.

There’s much more to the article including the payoff for the consultants doing the SAM reviews in getting to hawk their wares and also pitching Microsoft volume purchase agreements to the customers as a way to avoid further problems:

The EA is typically the most lucrative volume-licensing deal for Microsoft because a customer must commit to run a standardized package of its software on every desktop PC. In return, the company receives better pricing and the rights to all covered products released during the three-year contract time frame, as well as training and support benefits.

Which is why the Vista and Office 2007 delays have cascading ill effects, but I digress

Both of the SAM reference accounts that Microsoft supplied to Computerworld wound up signing deals for EAs after their consulting engagements — despite failing to meet the eligibility requirements for the program. To qualify for an EA, a company must have 250 or more desktop PCs.

Nice! Of course, this kind of thing works less well with more savvy customers, one of whom suggests that Microsoft just doesn’t “know how to do business with Fortune 500 companies.”

Filed under General Business, Legal, Licensing, Microsoft, Partner Program, Piracy

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