Microsoft faces protest over rise in charges

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The Independent Online

A delegation representing some of Britain's biggest companies is to meet Microsoft this week to express concerns over the way the software giant charges its customers.

A delegation representing some of Britain's biggest companies is to meet Microsoft this week to express concerns over the way the software giant charges its customers.

The meeting comes amid unrest with Microsoft's subscription-based licensing agreements for its software that are increasingly seen as poor value for money by many customers.

The secret meeting is understood to have been arranged for this Friday between Microsoft UK's senior management and members of the Corporate IT Forum, a body representing the IT departments of more than 140 organisations. Its members include half the FTSE 100 and FTSE 250 indices and collectively they have an annual IT spend of more than £20bn.

The Forum has estimated that Microsoft's subscription-based licensing agreements will have cost its members an extra £880m over the four years since they took effect in February 2002. There is a growing feeling among some of the company's UK customers that they may have to look at alternatives to Microsoft, such as the Linux open operating system.

The meeting will increase the pressure on Microsoft in Europe. The company, whose chief executive officer is Steve Ballmer, is already braced for a large fine tomorrow from Mario Monti, the EU's Competition Commissioner, after a five-year probe into allegations that Microsoft abused its Windows monopoly. The fine is likely to be around £331m.

At the heart of the meeting in the UK is Software Assurance, the subscription-based software licensing regime. Since its introduction there have been concerns among business customers that the fees demanded by Microsoft have left them worse off. Previously customers could upgrade software versions from old to new at less than the full price if they traded in their old versions.

Now, the Software Assurance system requires customers to pay an upfront fee and they are then sent the latest edition when it is released. The alternative to not subscribing is to buy each piece of software fresh each time it is published. One member of the Corporate IT Forum said: "Software Assurance is far too expensive for the business benefits we would gain through upgrades."

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