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Sunbelt W2Knews™ Electronic Newsletter
The secret of those "who always seem to know" - Over 500,000 Readers!
Thu, May 16, 2002 (Vol. 7, #39 - Issue #370)
Negotiating With Microsoft
  This issue of W2Knews™ contains:
    • Negotiating with Microsoft
    • What To Do If Your Firm Gets A Software Audit
    • The Windows Licensing Decision
    • MS Licensing 6.0 Program: Practical, Tactical Advice for Negotiating and Winning The Best Deal
  5. W2Knews 'FAVE' LINKS
    • This Week's Links We Like. Tips, Hints And Fun Stuff
    • The MS 6.0 Licensing Report
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Negotiating with Microsoft

Yup, it's getting closer. The deadline is August 1st. By that time you need to have made up your mind about what you are going to do with the new MS Licensing 6.0. Especially if you are a school, this requires some extra thought (and likely budget). Yours truly has even made it in USA Today about the very topic. See link here:

But in general, companies cringe when they think about the new MS licensing. It is something you need to confront head-on, as failing to investigate and handle this simply could cost you (a lot of) money. It's a big enough issue to make it in the major newspapers. Here is a link to the same USA Today with a lead article in the Business Section.

This particular newsletter is mainly focusing on this quite important MS 6.0 Licensing Issue, and as a heads-up. Don't let this wait too long! Do you have answers to the following questions?

  • Is your business ready for MS Licensing 6.0?
  • Does your company understand the new terms, conditions, maintenance and upgrade schemas and potential price increases?
  • What discounts have other companies been able to get?
  • How is software license non-compliance going to affect you?
  • Should you even do this? Perhaps switch over to other platforms?
  • How much is your software cost going to increase... 20 or 100%?
  • Should you start leasing your software, much like a car?
  • What hidden price increases are in the new 6.0 licensing?
  • How much should Software Assurance really cost you?
  • Can you still transfer licenses to other divisions?
If you have the answers, good for you! You're well ahead of the crowd. If you don't. Time to get cracking. We'll go into more about this a bit further down. Keep on reading.

The last XBOX Winner is Spurgeon Green from Tallahassee, Florida!
Congratulations Spurgeon!!

Quote Of The Day: "Treat others like you'd want to be treated yourself"

Warm regards,
Stu Sjouwerman
(email me with feedback: [email protected])

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What To Do If Your Firm Gets A Software Audit

(This is a small section out of Chapter Three of "MS Licensing 6.0 Program: Practical, Tactical Advice for Negotiating and Winning The Best Deal". See Book Of The Week Section.)

You are getting an Audit. The Software Business Association decided they are going to see if you have illegal software licenses. What to do?

First thing's first: Don't panic. Sunbelt and ITIC have consulted with dozens of organizations over the last eight months that have received auditing notices or threats from over-aggressive Microsoft sales representatives. In at least half the cases, the end user corporations confided to Sunbelt and ITIC that they knew their organizations had significant non-compliance issues. Remember the advice we gave at the beginning of this report: Proactive, Prepared and Patient.

Your company cannot prevent or avoid an audit. So your best hope for a successful resolution ? even if your firm has known software non-compliance issues ? is to address the situation in a straightforward manner. Assuming your firm has received notification of an audit by Microsoft or the BSA, you should use the 10-to-14 day grace period to:

  • Proactively perform a self-audit.
    You don't necessarily need a lot of money to initiate an audit. Follow the money. Start by identifying the personnel in your organization responsible for making purchasing decisions and documenting licensing usages and proofs of purchases. Have each of these people assemble the documentation. You must verify usage statistics including number of licenses purchased, installed, Select or EA discount level and version number as well as the expiration date. Compile a full profile of all the licenses and purchases and any "special deals" various groups or departments within the organization, received.

    You will need all of this information to present to Microsoft and/or the BSA for "true up" purposes. Once you have compiled the data, schedule a conference call or meeting with the appropriate corporate purchasing agents and IT managers, pursuant to establishing centralized purchasing procedures. Document all of your activities in this regard. This will enable your firm to assess the level of compliance or non-compliance and estimate how much you may owe Microsoft for unlicensed usage.

    Next, review and update your existing software licensing policies and procedures. If you don't have one, write one. Be sure to include enforcement procedures that contain explicit details of what actions corporate management will take against end users, IT managers and in-house developers who violate company policies. Next, make sure a copy of the software licensing policy and procedures are disseminated throughout the organization via Email and hard copy. In this regard, you will at least be able to demonstrate to Microsoft and/or the BSA that whatever its past mistakes, your organization is acting swiftly and decisively to address any non-compliance issues. Adopt a strict policy prohibiting any company employees from installing unlicensed software or even freeware or shareware.

    Finally, if your firm does not believe it is capable of handling the situation, hire an outside consultancy to assist you. And by all means purchase the appropriate software asset management and metering tools. If you can't afford it, then at least download any of the many free or 30-day free evaluation software that is available on the Web.

    Microsoft and the BSA also have free entry-level asset management and tracking software, which they make available to corporations. So there's really no good reason for not taking the time to perform a self-audit.

  • Be Prepared and cooperative when the auditors arrive.
    Have your documentation and records ready. If you have taken the proactive measures outlined above, your business should have a reasonably good idea of where it stands. Above all do NOT try and destroy evidence, or what is known in legal terms as "useful infringement evidence."

    Microsoft and the BSA will take this as evidence of malicious intent and they will be much tougher on your company. Cooperation ultimately will serve your company much better. This doesn't mean your firm must tolerate any unethical or inappropriate behavior on the part of the auditors. If you feel that that is the case, don't hesitate to get the company lawyers involved and voice your concerns and complaints to the appropriate parties at Microsoft. Again, remember that Microsoft wants to retain you as a customer, so if you are reasonable, then generally speaking, their auditors and sales people will most likely be open to making some concessions

  • Be Patient.
    Don't try and rush through either a self-audit or hurry things along with Microsoft and/or the BSA. It will likely backfire in most cases. Have your evidence and documentation ready and available. Your company does have the right to know how much of a non-compliance issue that Microsoft and the BSA think you have. And the audit itself should be completed within a reasonable timeframe, depending on the size and scope of your organization. The worst case of inappropriate vendor behavior in an audit, involved a well-known rival software maker.

    In this case, the subject of the audit was a Fortune 300 manufacturing firm with 17,000 end users worldwide. The firm was notified of the audit. It did its due diligence and proactively gathered substantiating data and offered full cooperation to the vendor auditor assigned to its case. The vendor auditor though, never said why the audit was being done, if the vendor suspected any non-compliance issues, it never offered any evidence or estimate of anticipated true-up costs.

    Instead, the vendor auditor in question asked the organization to provide him with sensitive company documentation and access to various procurement personnel in all of the company's global offices. To make matters worse, the audit dragged on for over a year with no end in sight and no indication to the manufacturing firm that it had any software violations. The end result: the company CEO went to the vendor CEO and complained. The software vendor CEO was startled to hear of the situation and the audit was called off. Again, be patient and indicate your willingness to cooperate, but make sure you have a skilled, knowledgeable employee working with the auditor.

    Make that person the central contact for the organization (along with corporate attorneys) but do NOT allow the auditors full access to employees unless it is in the appropriate legal forums.

Best Practices and Policies

From a policies perspective, Sunbelt/ITIC has identified a number of practices that help organizations to go a long way toward reducing the risk of an audit.

  • Centralize procurement.
    Corporations are well served by designating someone to supervise and track all license purchases. Wherever possible centralize procurement.
  • Schedule Regular Audits.
    Quarterly audits are optimal but may not be feasible for over-burdened IT departments; bi-annual audits are preferable. But at the very least companies should do an annual self-audit. This will give you a detailed view of your purchasing costs, actual usage and ultimately be more secure.
  • Maintain detailed proofs of purchase and documentation.
    The single biggest mistake and flaw organizations make is sloppiness. Human nature being what it is, most of us unwittingly fall prey to bad or sloppy behavior practices. IT asset management is 20% tools and 80% business. This typically takes the form of bad records or no records. If you can't prove that you bought it or own it, you're in big trouble and may end up having to pay twice for the same software and also penalties if you can't prove your innocence.
  • Have a corporate policy in place and enforce it.
    Every company should have a detailed software usage plan that sets forth Do's and Don'ts and expressly prohibits users from installing unlicensed software or downloading freeware and shareware. The policy should be distributed throughout the organization in both hard copy and via Email. The policies and procedures should also contain an explicit list of penalties for violating the rules. And finally, your company will have to diligently enforce the policy, or it will be meaningless.
(This is a small section out of Chapter Three of "MS Licensing 6.0 Program: Practical, Tactical Advice for Negotiating and Winning The Best Deal". See Book Of The Week Section.)

The Windows Licensing Decision

By Meredith Derby, Assistant News Editor, SearchWindowsManageability site.

CHICAGO, May 9. The response to Microsoft's volume licensing scheme was a mixed bag from Windows Decisions conference attendees. While several are ready to wholeheartedly comply, others are still weighing the pros and cons and have yet to make a decision. One thing is for sure: No one really understands the logistics of Microsoft's volume licensing plan.

Rick Woffard hopes to make a decision on his company's licensing by July 31. "Right now we're still investigating what we're going to do. We're not sure," said Woffard, information systems coordinator at Hydro-Gear in Sullivan, Ill. "It's a question of budgeting."

Kevin Rost, a network technologies manager, doesn't know either. His company, Autostock International of Barnaby, British Columbia, currently has a Select 5.0 license agreement. The question Rost is wrestling with is whether to stick with Select 5.0 or go with an Enterprise Agreement. "It's one of those things where we have to discover whether that's the best road to go or not. I don't think anyone understands it, so we're plugging along."

Tim Fenner's plan "is to go with an open license agreement and then Software Assurance." First, however, his company will move to Upgrade Advantage "because then it doesn't cost as much to get to Software Assurance." Fenner, network and systems administrator at Sun Prairie, Wis.-based Independent Pharmacy Cooperative (IPC), believes Software Assurance will benefit his company because it will keep them on the cutting edge of technologies by allowing easy updating.

On the topic of money, Fenner said, "It may not save us money. We may break even. We may pay a little more certain years, and some years we may save money." He understands that saving money is not guaranteed. Fenner's one big gripe: "You can't apply the Software Assurance license agreement to OEM installs." If you get a PC from Dell with Windows 2000 and Office installed, for example, you can't apply Software Assurance, he said. "You have to actually buy the agreement to upgrade that and then put the Software Assurance on it. That is discouraging." Full Article at:


MS Licensing 6.0 Program: Practical, Tactical Advice for Negotiating and Winning The Best Deal

There are dramatic licensing changes coming soon. The new Microsoft Licensing 6.0 Program is set to launch on August 1, 2002. It represents a radical departure from prior licensing schemes. Is your organization prepared to sit down at the negotiating table with Microsoft? Does your business have thousands of dollars available to spend on consultants' fees? If you're uncertain about the answers to any of the above questions, or if you just want the latest information and negotiating tips at your fingertips, then the new report "Microsoft Licensing 6.0 Program: Practical, Tactical Advice for Negotiating the Best Deal," is for you.

We wish this report could be free, but countless hours of analysis, surveys and interviews for the case studies have gone into this. However, we have decided to make this report available in two levels. Level One is very affordable so that everyone (even small business and educational institutions) can benefit: $295.

Level Two is $495 and comes with updates, two audio conferences and 10 email questions answered, specific for your business. This allows you to choose for the level of cost and service you can afford. The report was written by high-level analysts and if you would have to buy something like this from existing Industry Analysts, the cost would literally be ten times higher.

Product Features

This 50+ page report, jointly authored by Sunbelt Software, Inc. and Information Technology Intelligence Corp. (ITIC) provides businesses with a detailed overview of the changes, conditions and pricing structure of the new Licensing 6.0 Program. It includes the latest Sunbelt/ITIC survey data, negotiating strategies and customer case study reports.

Table of Contents

Introduction: Overview of the New Microsoft Licensing 6.0 Program

  • Chapter 1: Executive Summary and results of the joint Sunbelt ITIC Survey
  • Chapter 2: Examining the changes to the new Microsoft Licensing 6.0 Program
  • Chapter 3: Audit and Compliance: Microsoft, The Business Software Alliance (BSA) and your company
  • Chapter 4: Business Case justification and Netting out the Costs
  • Chapter 5: Best negotiating strategies
  • Chapter 6: FAQs
  • Chapter 7: Conclusions and Recommendations
Sunbelt and ITIC's message to businesses is straightforward: regardless of how small or large your company, you can negotiate better deals. The old saying: "the early bird catches the worm," has never been truer. Businesses will never have a better opportunity than right now to negotiate with Microsoft. Corporations that perform their due diligence, address software non-compliance issues and thoroughly prepare for contract negotiations, stand a very good chance of winning concessions and price reductions.

Sunbelt Software and ITIC are convinced that this report actually gets you the negotiating tools in your hands which will get you a better deal from Microsoft. If you do not save double the money you spent for it, you get a refund - no questions asked. This is unique in the industry. Just try to get this from any other Industry Analyst. The only condition is that we have to put a time limit on it. The money back offer is valid till Dec 31, 2002.

You see, we really want you to benefit from the wealth of data we have been able to gather, and make it as painless and risk free as possible. Click this link for more info:


This Week's Links We Like. Tips, Hints And Fun Stuff

  • One of the Bill Gates Personal Wealth Clocks, and what YOU paid him.

  • http://www.w2knews.com/rd/rd.cfm?id=020516FA-WealthClock
  • VOTE.COM even has a place where you can state if you think the new MS Licensing 6.0 is good or bad:

  • http://www.w2knews.com/rd/rd.cfm?id=020516FA-vote
  • Whoa Nellie! Apple goes (Unix) Enterprise Server!

  • http://www.w2knews.com/rd/rd.cfm?id=020516FA-Apple_Unix

    The MS 6.0 Licensing Report

    This easy-to-read report provides your business, you and purchasing agents with the latest information you'll need to make an informed decision on when and whether to migrate to the upcoming Licensing 6.0 Program and save (tens of) thousands in licensing fees. This report actually gets you the negotiating tools in your hands which will get you a better deal from Microsoft. It will get you the ammo to come prepared to the negotiating table and walk away with the knowledge you got the best deal from Microsoft you could get. So, is that worth a few hundred bucks? We think so. Buy here: