Devil's Advocate: You and Microsoft licensing - who's the customer?

Licensing is a subject close to the hearts of most IT departments. Martin Brampton asks what, if anything, can be negotiated with Microsoft?

What an extraordinary situation we are in. Microsoft protests that it is not a monopoly but it regards any purchase of a PC without a Microsoft operating system as grounds for suspicion. PC suppliers are apparently required to report customers who ask to buy PCs without an operating system to Microsoft.

Then, so it is said, the 'suspicious' purchase is likely to trigger a mandatory audit. In large organisations, supporting an audit can be a costly business. Given the difficulty of exercising precise control over thousands of computers, audits often come up with nasty surprises that lead to big financial penalties.

In fact, many organisations protest that the Windows licensing rules are so complex and restrictive that Microsoft is a significant cause of the difficulties. It is almost as if - perish the thought - Microsoft encourages a situation that paved the way for legal action against its own customers. Most organisations have no wish to shirk their contractual responsibilities but would very much like simpler mechanisms to ensure compliance.

You would think that in a competitive market large buyers of software would be able to negotiate a contract that precluded legal action unless gross breaches are detected. It is remarkably difficult for a substantial organisation to know how many systems are really in use. Local purchasing, mergers or acquisitions are just a few of the factors that can easily distort the numbers.

How many people use a PC? It is difficult to say when there are employees, contractors, consultants and so on, all being provided with basic facilities across many locations and often across several machines.

The issue is by no means confined to Microsoft. But there is a feeling that Microsoft is the most aggressive of the major software vendors when it comes to enforcement of software licences. In a truly competitive market, what can account for the company's confidence that it can pressure its large customers in this way?

After all, nobody opposes fair licensing of software. The question is, though, what counts as fair licensing. If a person uses two different computers, but never both at the same time, should that require more than one licence? If software is placed on every computer to cater for mobility, should that require a licence for every computer or only for the number of people who actually use the software? Should people who only want to make light use of enquiry facilities be charged the same as people who use an application all the time? Should it be necessary to buy software over again if the computer is replaced?

What if the boot is on the other foot? It is not so long since many PC manufacturers were paying Microsoft a fee for every PC made. Yet quite a few of those machines were not used to run any Microsoft software at all. In that situation, you might have thought there would be some right to audit the vendor, and insist on a refund of the fees collected on those machines. That never actually happened.

Well, perhaps some of the larger customers for shrink-wrap software could fight the legal terms? But that proves difficult. Most of the contracts are not negotiated but are presented as a standard feature of the software package. Frequently, a clause in the contract says that the law of a small US state governs it. Even large organisations balk at the difficulty of fighting a legal battle thousands of miles away in an unfamiliar jurisdiction.

Here is a chance for the European Union to create some helpful regulation. Why not introduce a regime where a software licence is only enforceable if the requirements placed on the purchaser are reasonable? And why not a right to challenge a non-negotiated contract within the country where the purchase occurred? That might even the balance a bit. But I will be surprised if it happens.

** Martin Brampton is a director and founder of Black Sheep Research (www.black-sheep-research.co.uk ), an independent consultancy providing research, writing and speaking services on a wide range of business and technology subjects. Martin was previously a director at Bloor Research, and has worked with IT as a user and analyst for over 20 years. He has been a frequent contributor to silicon.com's Behind the Headlines TV programme and can be contacted at silicon@black-sheep-research.co.uk .