New MSFT license provision may force Windows users to buy extra licenses

When is an operating system license not an operating system license?

When it's a Microsoft "Volume Licensing Program" license, apparently.

According to a new mailing being sent by the convicted monopolist, even those who pay Microsoft for membership in its bulk licensing program do not get "full" licenses for Windows. It's part of the company's latest push to force original equipment manufacturers to preload Windows.

"Some customers believe they can acquire full operating system licenses through their Microsoft Volume Licensing Program," reads a section labeled "Myth."

"Full operating system licenses are not available through any Microsoft Volume Licensing Program," the mailing continues, in a section labeled "Fact."

The part of the card which contains these sections is headed "The Bare Facts About Selling PCs Without Preinstalled Operating Systems."

The flier's contents can be found on Microsoft's Web site as well.

And the reason the "myth" exists may be because it is what Microsoft says in its Volume Licensing Program literature. For instance, a document covering Microsoft's "Enterprise Agreement" Volume Licensing Program, the company says:

"Enterprise Agreement offers a flexible way to standardize your company on the following enterprise platform of Microsoft products:
Microsoft Office Professional
Microsoft Windows Professional Desktop Upgrade
Microsoft Core Client Access License (CAL)"

And in a document for another Microsoft Volume Licensing Program, "Open License," the company refers to the covered software in its Appendix A:

"Product Pool

"Microsoft software programs fall under one of the following three product pools:

"1.Applications : Examples of Microsoft applications include Microsoft Office, Microsoft Visio®, and Microsoft Project. Developer tools and utilities, such as Microsoft Visual Studio® are also part of the Microsoft applications pool.

"2.Systems : Examples of Microsoft desktop operating system software programs are Microsoft Windows® 2000 Professional.

"3.Servers : Examples of Microsoft server software programs are Microsoft Exchange 2000 Server, Microsoft SQL Server 2000, and Windows 2000 Server."

From this, a prospective customer might conclude that operating systems are indeed involved. But Microsoft now says that this is a "myth".

"Sounds like they're pulling another fast one," says an official with one OEM, who asked that his name not be used out of fear of retaliation. "Have you seen how they're changing licenses and not telling anyone? Look at the OEM license. Or the current fixpack."

Indeed, the current Microsoft OEM license agreement contains this paragraph (in which Microsoft is referred to as "Microsoft," while the OEM is called "Company"):

"1.2 Microsoft reserves the right to revise this Agreement at any time. Notification may be posted online, or sent via email or postal mail to the address provided by Company during registration ('Registration') or as updated by Company. Company's continued use of any Account after such notification shall constitute Company's acceptance of this Agreement as revised." In short, putting any changes in the license agreement on the Web someplace in Microsoft's view is all the notification necessary, and if the OEM buys from Microsoft after the posting without finding, reading, and agreeing to the change, that's tough luck for the OEM.

Nor is that the only place where this policy is being employed. The End-User License Agreement with the "security" update to Windows Media Player in June contained this provision:

"Digital Rights Management (Security). You agree that in order to protect the integrity of content and software protected by digital rights management ('Secure Content), Microsoft may provide security related updates to the OS Components that will be automatically downloaded onto your computer. These security related updates may disable your ability to copy and/or play Secure Content and use other software on your computer. If we provide such a security update, we will use reasonable efforts to post notices on a web site explaining the update."

Robert X. Cringely summed it up: "Wait a minute! Did you just give Microsoft the right to go inside your computer and change pretty much anything they like even if it disables applications from other vendors -- applications you paid good money for? And if they do mess with the inside of your computer they don't have to ask permission or do anything except post an explanation on some web site somewhere?" Actually, Cringely may not have noticed the fullness of the "web site" reference. Microsoft did not promise to do so, it said it would "use reasonable efforts" to do so. There are those who would argue that what Microsoft finds reasonable, others may not Among those who don't is the unnamed OEM officer.

"I don't think Microsoft has any ethics or recognizes any law," he said. "This thing in which they are switching, or at least it looks to me like they're switching, the volume purchasing programs -- that's just so typical. They're squeezing everybody, really tightening up. They want to make sure that every computer in the world that is sold has one or more Windows licenses, whether there's Windows on it or not. It's much worse than it was when they made you buy a license for every processor you shipped. They're trying to set it up so that they can come in to your machine or all the machines at your business and make sure that their software is all you're running. Unless the other software you have comes from companies that have paid their tithe to Microsoft. It's worse than it has ever been, and I don't see anything stopping them."

The flyer, he said, is to pressure OEMs to preload Windows on every machine.

"Here are volume buyers who believe they have bought and paid for Windows, and I believe they have, too, but Microsoft wants us to make them buy another license. They want to make it impossible for companies to upgrade hardware and use their existing licenses.

"The PC business is already in a deep recession. Margins have gone down to almost nothing. And now Microsoft comes along and dumps this on us. And they make us be the bad guy."

What is the alternative?

"There isn't one, unless everyone all of a sudden switches to Linux or something. If you look at the licensing tricks they're trying to pull, you very quickly understand that there is nothing they wouldn't do to make a buck. That and gain control."

UNIX is being taken down by a UNIX clone named LINUX. Windows will have to be taken down with a Windows clone.