UK government: Schools shouldn't sign licensing agreements with Microsoft

Concerns over Microsoft's Office 2007 and Vista licensing terms have prompted a UK government agency to warn schools against signing licensing agreements. Becta, the UK's education technology branch, has also filed a complaint with the UK's Office of Fair Trading, alleging that Microsoft engages in anticompetitive practices in the academic software license marketplace.

Becta and Microsoft have been in talks over the issue, but they have yet to result in a solution acceptable to both parties. For the time being, Becta recommends that schools avoid Microsoft's subscription licensing program. School Agreement covers all of the PCs at a school, which means that admins don't need to keep track of the licensing status for every PC. The program also provides participating schools with all application and OS updates made available during the term of the agreement.

There are a few downsides to the School Agreement program, according to Becta. Microsoft doesn't provide sufficient clarity into the buy-out costs should a school decide to get out of the program, says Becta. The agency is also concerned that Microsoft's academic subscription setup doesn't allow schools to obtain a perpetual license—unless they make a buy-out payment. Lastly, Becta would like to see Microsoft drop its all-or-nothing licensing requirement—all PCs on campus must be a part of the program, even if they're not capable of running Vista or Office 2007.

Becta also has some more specific concerns regarding Vista and Office 2007. It believes that Vista's feature set isn't enough to justify upgrades at this point. In the case of Office 2007, Becta would like to see stronger support for the ODF format used by OpenOffice.org and better interoperability with Microsoft Works.

Schools that have already signed up for Microsoft's School Agreement are encouraged to "consider their renewal and their buyout options," according to Becta.

Microsoft, like other software vendors, likes subscription licensing models because they provide a stedy stream of revenue over a product's lifecycle instead of incremental revenues centered around major releases. Unfortunately for the software giant, the elongated release schedule for Windows—there was over five years between the releases of Windows XP and Windows Vista—have left some licensees doubting the value of Microsoft's licensing programs.

A report released last summer by Forrester Research questioned the value of Microsoft's Software Assurance subscription licensing program. It looked at the average annual cost of a SA agreement and found that it ended up costing companies significantly more money over a four-year period. Those costs increased if a new version was delayed even more.

Realizing that overly-long release cycles are not good for business, Microsoft is attemting to shorten the time between major releases. The company is targeting a 2010 release for the next version of Windows.

Microsoft has vigorously defended its licensing programs in the past, telling Ars in the case of the Forrester report that the findings were not in line with the feedback the company had received. The company was not able to offer comment on this story prior to publication, however.

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