The people who run this city recently heard a familiar pitch
from Microsoft: Sign up for a multiyear, $12 million software licensing
plan or face an audit exposing the city's use of software it hadn't paid for.
Microsoft warned that the city could be slapped with stiff fines for using
any Microsoft software for which it could not produce receipts.
Scores of other businesses and public agencies, facing a similar dilemma,
have agreed to the new licensing deals — a linchpin of Microsoft's growth
strategy.
Not Houston.
The nation's fourth-largest city rebuffed the offer and has embraced an
obscure competitor called SimDesk. SimDesk delivers software over the
Internet at a fraction of the cost of Microsoft's Office, a software suite
used on 94% of America's office personal computers. Houston is giving
SimDesk to tens of thousands of residents and businesses, free. And it has
begun using SimDesk as an Office substitute on at least half the city's
13,000 PCs.
. . .
Piper also theorized that by storing files on SimDesk's server, instead of
on individual PCs, city workers could get to them anywhere via the
Internet. The city wouldn't need new PCs and could slash spending for
Office. Piper estimated savings of $1.6 million the first year and $7.1
million a year indefinitely if SimDesk replaced Office on 50% of city PCs.
. . .
[Microsoft sales rep John] Haines complained to Tatro and other council
members, they say, that Piper misled him by not spelling out that the city
was looking for an Office replacement. Microsoft spokeswoman Stacy Drake,
in a recent interview, called the proposal process controversial and
questionable. She would not be more specific. Haines declined interview
requests.
City officials say it is a contractor's responsibility to analyze bid
requests, which usually don't specify that a product or service will
replace something else. More than 20 companies studied the bid request. Six
attended a pre-bid conference, city records show. Microsoft was not among
them. Only SimDesk submitted a bid. The proposal called for a suite of
desktop software for a variety of sites as well as on "up to 15,000 desktop
computers."
. . .
word spread that Microsoft could audit the city's software use. It was
general knowledge from the department heads on down that Microsoft was
putting pressure on the city to try to stop SimDesk, says Chernoff, the
Houston tech project manager.
While not an audit, Haines produced data purporting to show the city owed
Microsoft $1.1 million for software he said was being used illegally by
city workers, Lewis says.
Like many companies and organizations, Houston had haphazardly acquired
software over the years. Each city department had several ways to acquire,
deploy and track it.
Microsoft's Drake insists that Haines was engaged in a routine "inventory
review" unrelated to SimDesk. Such reviews are really a cooperative
process to ensure accuracy and clarity relating to the licensing of our
software, she says.
Lewis decided to do his own count of Houston's software. Discrepancies soon
cropped up. Microsoft's data showed the public works department to be short
252 Office licenses. But the city's check revealed it had 135 more Office
licenses than it needed.
By Microsoft's count, another big department, the library, looked to be
short 450 Office licenses. But Houston rounded up documentation covering
all of those copies, including 111 donated by Microsoft Chairman Bill
Gates' charity foundation.
Houston said it owed Microsoft, at most, $500,000.
Haines responded with two new contracts, both for less than the original
$12 million, Lewis says, although neither side will release details.
Microsoft is checking Houston's count. Lewis hasn't indicated interest in
Microsoft's revived offers and says he's committed to the SimDesk deal.
If we owe Microsoft anything, we're prepared to pay, he
adds.
