Per user or per device

Keeping it simple just might win.

Posted by Trevor Pott on Jul 25, 2013 in Blog | Comments Off on Per user or per device

Technology changes at a frightening pace; the future is now. Tomorrow arrives unexpectedly and frequently with little regard to the conventions and ideals that made yesterday possible.  Mobile devices, the cloud, Bring-Your-Own-Device (BYOD), X-as-a-Service and other Gatneresque buzzwords have reduced traditional PCs and notebooks to a commodity.

For Microsoft, this is devastating.  Their entire business model was built on traditional PCs and the servers that drive them. Their licensing model, marketing, management and entire corporate culture are designed and refined to support a declining market segment that likely will never see growth again.

Microsoft believes that its software has intrinsic value; a license should be paid for every device that accesses software containing Microsoft’s intellectual property.   Google believes that software is a means to an end, not an end unto itself; it is the data that is valuable, not the software that manipulates it.  Google charges on a per-user basis to access the tools required to manipulate that data.  It gives the operating systems away for free.

Per device versus per user; the debate over which was more efficient has raged for ages. Microsoft has offered lip service to the concept for decades; however, its licensing models have always leaned towards per-device.  Software has device limits for install, Microsoft’s remote-access implementations make you count the number of devices you remotely access your desktops from, and so forth.

Microsoft have even recently increased the cost of their per-user licencing by 15% because individuals using that model were (in Microsoft’s view of the universe) getting too much value for their dollar.  Back when there wasn’t even a computer for every employee – and families often had a single PC for all members – this view of the world made a sort of sense.  End users didn’t feel overly burdened by it; we saw this as fair and equitable.

Slowly but surely, every employee got a computer.  Every member of the household got one too, and we often had a laptop or netbook to compliment our PCs.  We all got smartphones and eventually tablets.  The number of devices we are attached to just keeps going up.

It starts to become unreasonable to expect that same person to buy a $150 Windows license and $500 copy of Office (amongst other software) for each and every one of those devices.  Even Microsoft’s subscription-based Office 365 only goes so far towards addressing the issues.  Office 365 allows you to install Office on up to 5 devices; but 5 devices is rapidly becoming the minimum number of devices that people belong to!

If we count the virtual machines I use for personal communications, office work and testing as well as my notebooks, desktop PCs phones and tablet I myself own and use weekly at least 30 devices.  I travel, accessing my operating system and applications for – at last count – over 300 different devices over the course of a year.

As “the internet of things” starts to take off, my experiences will become more common. We have fridges with touchscreens and internet access now.  Wearable computing is taking off, we’ve got computers in our cars, televisions, shoes and who knows what else.  In Google’s world, I pay $50 per person per year and I can access their offerings from as many devices as I want.  Google makes their money by scanning my data and advertising at me.

For the number of devices I use, Google’s approach would be equitable at a dozen times the price; far more so than Microsoft’s licensing, which would quite literally bankrupt me.  This is a battle of philosophy; one which Microsoft is ill equipped to fight.  As the number of devices we use explodes, Microsoft’s per-device approach to licencing will earn it ever-increasing enmity from its userbase.

Microsoft believes in telemetry; gathering data and paying close attention to metrics.  It designs its licencing models for the middle of the bell curve and that is exactly the problem.  Today’s licencing models are based on the middle of yesterday’s bell curve.  Tomorrow will see the “Microsoft tax” surge from merely “irritating” to “ruinous.”

If Microsoft doesn’t change – and soon – Google will win.  Google offers software that’s just barely “good enough” while presenting a dramatically new licencing model more in touch with the economic reality of the times.  This gets Google into educational institutions, consumer’s homes… anywhere that doesn’t have the unlimited funding of large enterprises; once embedded, Microsoft usage falls off.  This is how Microsoft became the behemoth it is today; I wonder if those in charge can appreciate the irony of it all.