Licensing Math

Microsoft's licensing scheme is anything but all-inclusive. That was the lesson AWC CIO Dale Frantz needed to get across to customers, suppliers and employees.

Using a Microsoft e-mail system as an example, Frantz explained that the user company first has to buy server hardware, then it must pay for Windows Server software and Exchange Server software. "And that just gives you your central Exchange e-mail server. That doesn't give you the right to attach to it," he notes.

For each e-mail user, you must also pay for a client access license, he says. If you have a user with cell-phone-enabled e-mail as well, you have to pay for two client- access licenses. "It doesn't take very much to see how your costs are huge just around a Microsoft e-mail system," he says.

The same applies to virtually all Microsoft products, Frantz says. "You buy a server, then you layer on SQL Server or Exchange Server, then you add on client access licenses, the numbers get huge very quickly," he says.

Here's what a typical AWC executive uses and what it costs under Microsoft:

Device MS Office MS Outlook
Office desktop $371.40 +$129.87
Home desktop 371.40 +129.87
Travel laptop 371.40 +129.87
E-mail-enabled cell 129.87
Totals: $1,114.20 + $519.48
Grand total per exec: $1,633.68

In contrast, with Macs, when you buy the hardware, the software is included. "With Apple, the e-mail client is included on all Macs and on the iPhone, with no additional licensing of any kind," Frantz says.

This appeals to him because it makes costs more predictable and it makes software license management simpler and less expensive.

"Apple includes their full server suite of software in the price of every Xserve that you buy. Whether it's a file server, a wiki server or something else, you get their full server software suites included in the price of the Xserve. There's no additional software cost," Frantz notes.

Microsoft Vice President Margo Day says that what customers are paying for is the "seamlessness" of Microsoft's products. "Licensing costs are just one part of the equation," Day says. "As we look at how we engineer our products and how seamlessly they work together, we actually defray the cost that customers used to have to bear to get lots of software to work together or to work on different form factors. I would point to the cost avoidance you get in not having to integrate lots of systems together."

"There's no doubt that Apple's approach resonates with enterprise IT in that you buy it once and deploy it everywhere without getting into lots of individual additional license fees," says Michael Gartenberg, an analyst at JupiterResearch and a Computerworld columnist. In addition, Apple's simpler licensing scheme "comes at a time when Apple is very focused on being standards-based, and its clients are Intel-based. What that means is they can always run Windows," he says.

The bottom line, says Gartenberg: "We'll see a greater emphasis on Apple focusing on the enterprise in 2008."

Copyright © 2008 IDG Communications, Inc.

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