MS to meet with Aussie business over licensing concerns

Microsoft CEO Steve Ballmer yesterday defended the company's new licensing regime against charges it generates significant price hikes for users, despite attributing a boom in first quarter revenue to the program.

Ballmer has exhorted clients who had problems with the new licensing to contact him so they could "work through the problems". He said last week he would be meeting with dozens of enterprise customers while in Australia.

On Channel Nine's Business Sunday program Ballmer revealed about 86 percent of large Australian corporations had taken up the new licensing, a significant increase over the amount given at last Thursday's press conference, when he passed a question on the topic over to Paul Houghton, managing director of Microsoft Australia.

"Well over 60 percent of enterprise customers...have taken advantage of some longer term licensing with us," said Houghton at that time.

Ballmer indicated Microsoft was successful in mollifying the concerns of its enterprise customers. "I'm not saying every one of those is necessarily thinking they're one hundred percent happy but I think we have worked on the issues that people have," said Ballmer on the Business Sunday program. "We've tried to work through things on a constructive manner with our customers."

Ballmer was quizzed about the 26 percent increase in revenue from US$6.13 billion to US$7.75 billion, and said that it wasn't sustainable.

"I actually think we tried to be quite cautious in our earnings statement to say whenever you make a change you will have some customers who want to buy in front of the change," said Ballmer. "It will certainly come out of future revenue."

When asked whether a price hike, as the new licensing program is widely perceived, was appropriate at this stage of the business cycle, Ballmer responded that the licensing program was conceived over two years ago, and launched over a year and a half ago.

He reiterated previous comments that Microsoft would do things differently if they could do the introduction over again, and admitted some customers would see their total cost increase.

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