Back to school

THIS WEEK OUR examination of Microsoft's licensing practices takes us to school -- in Microsoft's own backyard, in fact. It appears that school districts in the Northwest have some lessons they can teach us all.

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Earlier this year a number of school districts in Washington and Oregon received a letter from Microsoft demanding they conduct a software audit within 60 days. The letter was quite similar in most respects to the ones we've seen many of Microsoft's business customers receive from a Microsoft attorney or "Licensing Compliance Manager" in the past. And, just as with those, the message between the lines was clearly the suggestion that the recipient ought to sign up for an organization-wide volume license agreement to keep from getting future audit requests. But the response was perhaps not what Microsoft had in mind.

The timing of the letter couldn't have been much worse, particularly for the public school districts in Oregon, which are in a deep financial crisis. With budgets spent and the end of the school year approaching, finding the money to conduct the audit in Microsoft's time frame was simply an impossibility for some.

"Our record keeping on the licenses is in good shape, but we've estimated that just hiring the bodies to send out to each school to check each computer will cost about $60,000," one reader at a public school district in Oregon told me. "That's a teacher's salary, and if we had it, that's what it should be spent on. We shouldn't have to spend it just because Microsoft wants to get people to buy a $50-per-computer campus agreement."

By the time I heard from that reader, however, Microsoft had already backed off its 60-day deadline. Reaction to the letter had been strong enough to come to the attention of Oregonian columnist Steve Duin, who in April wrote a scathing piece about Microsoft's actions. Representatives from many of the affected Northwestern schools met as a group to plan a common negotiation strategy and discuss the possibilities of moving to open-source solutions in the future. A few weeks later, Duin was able to write that Microsoft was backing down at least so far as to allow the schools until the end of the year to conduct their audit.

While this was a nice little victory for the power of the pen and for group solidarity, one thing intrigued me further. After the Oregon reader sent me the original letter his school had received, I noticed there was one significant difference between it and the letter I've seen sent to business customers. Amid the prosaic remarks about how Microsoft wants to encourage its customers to make "software asset management" a central goal of their lives, it stated that it was requesting an internal software inventory "pursuant to the audit clause contained in your volume license agreement."

In other words, this was not a polite request for a "voluntary audit," as Microsoft officials have always characterized the letters business customers receive. It was an outright demand to fulfill a contractual obligation under the school's license agreement and/or the state's volume purchase plan. Why, I wondered, is Microsoft so much more hard-nosed about ferreting out piracy amongst the grade schoolers than it's been with the business crowd? Could this portend an even tougher attitude from Microsoft license compliance troops (what other company even has such folks in its sales and marketing force?) that business customers can anticipate seeing soon?

Not according to Microsoft officials. A representative for Microsoft's education group says the letter to the schools was a mistake. "The letter and the process by which is written was really insensitive to our customers," says the representative. "The intent was to make sure the customers had a conversation with us about software asset management, because having that can save them dollars. While we believe it's important to do this audit, we want to work with our customers to make sure the timing is appropriate for them. We realize those letters lacked sensitivity to all the other responsibilities schools have and the fact that their budgets are very tight. Going forward, we've learned a hard lesson from this about how to work better with our customers."

Interestingly, the representative also confirmed that the letters were not just sent to public districts in Oregon and Washington. Five hundred letters were sent to public and private educational institutions in 38 states over a nine-month period. The schools in the Northwest were among the last to receive them in March, so their 60-day deadline for completing the audit was closer to the end of the school year than most other recipients.

I suppose it's true that the timing of the mailing in the Northwest, along with the desperate financial situation of the Oregon public schools, was responsible for bringing the letter to light. But I seriously doubt that letter recipients in other parts of the country were much happier to get it. School budgets everywhere are tight, and the expense of inventorying every computer at every school is one that had to be resented everywhere. In fact, even school districts with perfectly fine "software asset management" systems probably had a few choice words for their Microsoft compliance manager.

Microsoft says the letter was a mistake, but why did it take them nine months to realize how "insensitive" it was? Why did it only dawn on them when their customers' screams got loud enough to be heard by a newspaper columnist? Microsoft says it has learned a hard lesson, but there's something this episode can teach us all. If you suffer in silence, the suffering is just going to get worse.