Microsoft Drops NT Workstation Pricing Bombshell
Microsoft announced special pricing incentives on its Windows NT Workstation 4.0 product effective September 1 through December 31, 1998. Customers participating in the Open License program can elect to purchase NT Workstation 4.0 as part of a premium package that includes free updates for 2 years. Under the new program, which Microsoft calls Windows NT Workstation License Advantage, customers pay a $38 price premium for NT Workstation 4.0. In return, they receive all major service packs and option packs, plus major and minor point upgrades.
The biggest draw for corporate customers is the built-in upgrade to NT 5.0. By pricing the Advantage version so that the delta between it and the basic NT Workstation 4.0 license is less than the expected upgrade price for NT 5.0, Microsoft hopes to encourage customers to adopt NT 4.0 today.
The NT development team has made it clear that the migration to NT 5.0 will be smoother from an NT 4.0 base than from Windows 98. Adopting NT 4.0 today gives organizations a head start on implementing an end-to-end Windows NT environment that customers will need for full NT 5.0 functionality.
"This year, we have seen a tremendous number of companies deploying Windows NT Workstation," said Yusuf Mehdi, director of Windows marketing. "With the new Windows NT Workstation License Advantage, we now have made it even easier and [more] cost-effective for customers to take advantage of the robust capabilities of Windows NT Workstation on all their desktops."
Reaction has been overwhelmingly positive: "We've been doing migrations for Microsoft Windows NT Workstation for our larger customers, and now this promotion makes it easier for our small and medium-sized customers to also move to Windows NT Workstation," said Eric Jones, regional vice president of Sentinel Technologies.
One unexpected beneficiary of the program is Windows NT Server, Terminal Server Edition. The biggest complaint about Terminal Server has been that all connecting users must also possess an NT Workstation 4.0 seat license. Through the new Windows NT Workstation License Advantage program, customers can purchase the necessary seat licenses today at the premium price and then cash them in for NT 5.0 Workstation licenses. Organizations might be able to defer the client-side costs this way.
Given the built-in upgrade to NT 5.0 and the fact that the Open License program is available to firms with as few as five desktops, this pricing incentive is likely to work well for Microsoft and its customers. For more information about this incentive, go to http://www.microsoft.com/enterprise/licensing/open/open_home.htm.
—Craig Barth
SAP Embroiled in Lawsuit
SAP AG enterprise resource planning (ERP) solution vendor is in hot water over its alleged failure to live up to its billing. According to representatives of the now defunct FoxMeyer pharmaceuticals company, SAP's flagship ERP solution, R/3, fails to perform as advertised. FoxMeyer says the $65 million R/3-based order processing solution it purchased from SAP was unable to keep pace with the high volume of sales, forcing FoxMeyer into bankruptcy.
FoxMeyer introduced the SAP solution as a replacement for a system on an aging Unisys mainframe. However, company officials say that when they tried to switch to the new system, the SAP solution was incapable of handling the estimated more than 400,000 orders that the company needed to process per night.
The new system was barely capable of processing 10,000 orders in the same time period. Allegedly, FoxMeyer is suing SAP, claiming that the company misrepresented the suitability of its solution for FoxMeyer's environment.
SAP officials deny that FoxMeyer's lawsuit has any validity. The company is quick to point out that FoxMeyer has filed similar suits against other companies, including Andersen Consulting and Deloitte & Touche.
FoxMeyer's suit against Andersen Consulting alleged that the consulting firm used trainees and not experienced professionals in implementing SAP R/3 software. The suit claims that flawed implementation of the software was a large factor in FoxMeyer's subsequent liquidation. A prepared statement from Andersen Consulting calls the claims "Outlandish and totally at odds with the facts."
Even if the suit is eventually thrown out, the legal actions that FoxMeyer has taken will serve as a distraction for SAP, one that SAP would just as soon do without. No matter the outcome, FoxMeyer's suit reinforces the need for vendors and systems integrators to be careful about overpromising with their mission-critical product suites.