In a letter to The Patricia Hewitt, Secretary of State for Trade
and Industry, tif is asking the UK government to investigate
immediately what it describes as Microsoft's “Windows tax”.
According to tif., whose 98 members organisations encompass 22 of
the FTSE top 50 and collectively spend £18 billion on IT annually,
Microsoft is imposing a new pricing policy on its customers which
could see tif members alone paying an estimated additional £880
million over a typical four year investment cycle.
With Microsoft products being the de facto standard for desktop
and laptop computer software, tif members believe that the
company's new pricing policy amounts to an abuse of its dominant
position under the terms of the UK’s Competition Act of 1998. At a
meeting of tif held on 19th September, members voted unanimously to
bring the issue to the direct attention of Patricia Hewitt, in both
her role as Secretary of State at the DTI and as e-minister to the
Cabinet.
"Our members have been loyal Microsoft customers for many years
and they are furious. This new pricing policy is a slap in the face
of every Microsoft customer. For our members and all UK businesses,
there are no immediate alternatives to using Microsoft software and
the company knows this," said David Roberts, chief executive of
tif.
Roberts continued, "At a time of economic downturn, Microsoft is
telling its customers to dip further into their pockets. But for
what? Microsoft have added a few bells and whistles to its new
software, but research amongst our members reveals that these have
not been requested and are not wanted."
Tif has made representations to Microsoft regarding the new
pricing structure but received responses indicating that Microsoft
has no intention of reconsidering its position. The results of
these discussions were reported to tif members on 19th September
resulting in the decision to take the issue to the Government.
Also at the meeting tif members, whose organisations have
collectively over 2.2 million desktop PCs and laptops and a further
52,000 Microsoft related servers, reported that whilst they have
few options at the moment, they are seriously looking into
migrating away from Microsoft products and delaying new purchases
if Microsoft persists with its plans. Many members have already
called a halt to new Microsoft projects.
David Roberts continues, "Research amongst tif members reveals
that the new pricing structure will result in a jump of almost 100%
in the cost of owning Microsoft licences. This money has not been
budgeted for by organisations, so where will it be found? From less
investment in R&D, from lower recruitment? Does Microsoft
realise the damaging impact its pricing policy could have on
British business?"
