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Commentary: Microsoft hasn't totally reversed its policy on fees

Microsoft has maintained that the cloning of Windows workstations was a usage right available only at extra cost. Is the company reversing this position by allowing its "Select" customers to reimage at no added fee?

By Neil MacDonald and Alexa Bona, Gartner Analysts

For the past two months, Microsoft has maintained that the reimaging and cloning of Windows workstations was an advanced operating system usage right, available only at extra cost. Now Microsoft has partially reversed this position by allowing its "Select" customers to reimage at no additional fee.

Although this change will benefit some businesses, others will still pay substantially more for Windows.

See news story:
Windows licenses can cost extra for small businesses
Select customers that have used the Microsoft-provided Select media to reimage their workstations will no longer be required to purchase upgrade licenses. Microsoft also stated it would provide written confirmation of this change to any customer requesting it.

Since July, Gartner clients have indicated that Microsoft's sales force has pressured companies to purchase OS upgrade protection for all of their workstations since the machines were deployed using a reimaging process and Microsoft's original equipment manufacturer (OEM) Windows licenses do not allow reimaging. Microsoft justified this view on the grounds that without an upgrade license, which costs between $96 and $171 per workstation, businesses are not permitted to reimage workstations using Microsoft media--even if the workstation is reimaged with the same version of Windows delivered by the OEM.

In Gartner's view, Microsoft's official public statement about the change in policy is somewhat misleading. The statement: "Microsoft has changed its licensing policies to allow its Select License and Enterprise Agreement customers to use volume licensing media to re-image...with an identical version of the product without the need to purchase a volume license."

However, the pay-for-the-right-to-reimage rule affected few enterprise agreements as most include upgrade advantage on the OS. The change Microsoft has made is that enterprises falling under a Select agreement now have the right to reimage without requiring the purchase of an upgrade license.

Although promising, the final point in the brief needs clarification. It states: "Microsoft software products covered by a volume license continue to be covered by the terms of the customer's Select License or Enterprise Agreement. Microsoft software re-imaged using volume licensing media but not covered by a volume license continues to be covered by the terms of the original End User License Agreement (EULA)."

As the basic Windows OS licenses are not available for purchase through Select, and because an upgrade is no longer required, these licenses are "not covered by a volume license." Thus, they continue to be covered by the terms of the OEM EULA. However, the OEM EULA does not allow reimaging, so things are back where they started. Gartner expects Microsoft to clarify this issue in a revised brief.

Microsoft has addressed this issue for its largest customers--those falling under an enterprise or Select agreement. However, Gartner recommends that Microsoft address this issue for all of its customers. Reimaging is a useful deployment and support mechanism for enterprises with as few as 10 desktops. As it stands, all reimaging using OEM-provided media continues to be prohibited. Enterprises that do not fall under a Microsoft volume purchase program are not permitted to reimage. Furthermore, even enterprises purchasing under Microsoft's Open agreement are still required to purchase upgrades before reimaging.

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

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