Whenever Microsoft are changing their licensing rules then it means that a number of customers says “Goodbye Microsoft”. And the changes Microsoft did as of June 1st is no difference. Yesterday I had a customer contact me because they had received an email with the following message:
On June 1, 2010, Microsoft will begin requiring a Business Ready Enhancement Plan when making additional license purchases on supported versions of Microsoft Dynamics NAV and Microsoft Dynamics AX.
My customer had received this from their old Dynamics and was ready to say goodbye, not only to Dynamics, but to Microsoft in total. And I must say that when I first read this, then I was also way up there thinking “oh no!”, if they suddenly was starting to say that all customers had to change their current Module Based License (MBL – where you pay for each module/granule) to the Business Ready License (BRL – where you pay for each user in a basic or advanced edition).
After investigating the changes to the Dynamics licensing then I found out that it is actually not THAT bad. The thing is that the Business Ready Enhancement Plan is just the name of the enhancement plan valid for both MBL and BRL licenses.
But it is bad enough: From June 1st 2010 only customers with an active enhancement plan will be able to buy additional users and modules for their Navision or Axapta.
Microsoft have been running campaigns to get current owners of Dynamics to sign up with the enhancement plans since February 1st. where the customers could sign up without paying the additional fees you normally must pay if you didn’t have an active plan for your license for a period. But this campaign finished on May 30th.
So if you didn’t take on this offer from Microsoft before, then you must pay the full enhancement plan if you want to add new modules or users to your existing license. And that can actually become a very expensive affair. You have to pay the full enhancement fee for the whole period, plus a “punishment fee” for not having the plan.
I do understand that Microsoft is doing this, they want to pressure all customers to buy the enhancement plans. And if they were doing this change for all new customers then I would say that it would be fair.
But that is not the case. Microsoft are suddenly saying to customers “If you do not pay, then you can not expand your current Dynamics ERP solution. You cannot add new users!” – it’s almost like putting a gun to their head. Until now the customers was not able to get new versions, but they knew that they had a great and stable product which they could continue to use for many years. And the have always been able to buy additional users or modules without problems.
In fact I don’t understand how Microsoft is actually allowed to do this change to existing customers. This cannot be legal!
Actually they announced this last year, so its not really new news. I am a bit surprised that your customer just found out.
I guess the logic is that since they make no money really out of unsupported customers its worth the risk of losing some in the hope that some will sign up on support.
Its their product so I can't say how it could not be legal. For sure its immoral, but all they are saying is "sorry we wont sell you product any more". It doesn't affect the software they already own.
Like A car company saying we no longer sell Oil filters for a particular car. Its wrong, but legal.
I know it's not that new. My customer here had moved and the address on the license had not been changed, so that's most likely why they didn't receive.
But it's not quite just the fact that they stop selling oil filters. It's the same oil filters as for their new car models. They just tell you that you cannot buy them, unless you have bought their insurance for the new car models, even when you are perfectly happy with the 20 year old model you own!
I think this is fair as long as they continue invest in the product and continue improving product in the same pace. Most of ERP vendors are doing the same or switching to SAAS model – what mean charge per month anyway. Any vendor needs protection from downturns as last one.
What is not fair that they made Partners responsible for customers subscribing for support. I your customers does not subscribe partner will lose there “Partner” status. In my experience customer decides to stop paying for Enhancement only if:
1. They do not feel that it provides enough value…
2. Company business is matured and they do not need changes
3. Company loses business or going out of business
4. Company get bought by somebody who uses other system
I can’t influence any of this but during this downturn I would lose my partner status… Everybody are trying to save money – why Partner has to be punished for this???
Well... I don't quite understand one issue here - is this principle changing country by country?
Because here in Latvia the "news" were in effect for ages already, no license change -- read additional granules or users or MBL-BRL transfer -- if client is not on enhancement plan or whatsoever it was called earlier. Only exception was local AddOns as Payroll or like.
The question is - was it the initative of MS Latvia, or Partners (as they benefit a little from yearly fee, too)...
@Modris: Different countries have different rules. And in general what MS are doing (as far as I can see) is trying to make the rules similar in all countries. And that's actually a good thing. I just think that it's wrong to change such rules for existing customers, who have bought the product whilst there was different rules.
I tend to lean towards agreeing that it is a stupid change.
If a customer wants to buy something from you, and is willing to pay the asking price, why would you not sell it to them? The customer gets what they want, Microsoft makes money, it's a win-win.
I'd like to think Microsoft evaluated this decision very heavily and found that the customers who would leave their products would not outweigh the new customers on Enhancement. They are out to make money at the end of the day after all.
I think it's fair. Without continual support from the customer base, how can one expect the software to improve?
How Microsoft spends the money received from the enhancement fee is a separate issue.
I made a post about whether the customer should or should not be on the enhancement here:
This might end up in more license turnover for us.
When upgrading every 8 years - it is cheaper to buy a new license rather than buying the enhancement plan.
It is very hard to argue why the customer should buy the enhancement plan if he does not intend to upgrade within the next 5 or six years?
I do not think that it is fair.
It would be the same as if you cannot buy petrol anymore if you did not service your car according to the cars maintenance plan.
This is an old news.
I agree with the idea of Thomas Brodkorb because I think Microsoft did that is not fair.
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