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Microsoft The Almighty Buck Businesses

Microsoft Steeply Raising Enterprise Licensing Fees 571

Posted by Unknown Lamer
from the linux-still-free dept.
hypnosec writes "Microsoft is trying to make up for below expected earnings following Windows 8's and Surface RT's lack luster adoption rates by increasing the prices of its products between 8 and 400 per cent. Trying to make more out of its enterprise customers who are tied under its Software Assurance payment model, Microsoft has increased user CALs pricing 15 per cent; SharePoint 2013 pricing by 38 per cent; Lync Server 2013 pricing by 400 per cent; and Project 2013 Server CAL by 21 per cent."
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Microsoft Steeply Raising Enterprise Licensing Fees

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  • by Anonymous Coward on Tuesday December 04, 2012 @01:06AM (#42176251)

    Microsoft method: Milk them for every cent.
    Linux method: Free is free. Nobody can hold a gun to your head under the GPL.

    • Re: (Score:3, Informative)

      by Moblaster (521614)
      It's a free market. Microsoft is not forcing anyone to buy its products. If may be mildly coercive in the short term to companies that feel they "must" use Microsoft products, but raising prices is also the best method to charge customers what the product is really worth to them. If it's worth it to switch, they will. But if not, then fair is fair.
      • by Raven42rac (448205) * on Tuesday December 04, 2012 @01:12AM (#42176275)
        It's strong-arming if you vendor lock a customer than steeply raise rates. blah blah free market blah blah still an adversarial dick move.
        • by Tough Love (215404) on Tuesday December 04, 2012 @01:50AM (#42176439)

          It's strong-arming if you vendor lock a customer than steeply raise rates.
          blah blah free market blah blah still an adversarial dick move.

          Not merely a dick move, but illegal under the Sherman and Clayton [justice.gov] antitrust acts.

        • by Anonymous Coward on Tuesday December 04, 2012 @02:36AM (#42176657)

          One license to hold them, and in the darkness bind them!

      • by Anonymous Coward on Tuesday December 04, 2012 @01:24AM (#42176321)

        It's a free market. Microsoft is not forcing anyone to buy its products. If may be mildly coercive in the short term to companies that feel they "must" use Microsoft products, but raising prices is also the best method to charge customers what the product is really worth to them.

        If it's worth it to switch, they will. But if not, then fair is fair.

        A free market? Are you shitting me? Microsoft has a near monopoly on corporate workstations. If it was a free market then you wouldn't need to make a free operating system like Linux just to try to compete. Microsoft has worked long and hard to make sure that nobody can compete with them by erecting barriers to the free market. The free market is Microsoft's enemy number one.

        • by FaxeTheCat (1394763) on Tuesday December 04, 2012 @05:09AM (#42177153)

          If it was a free market then you wouldn't need to make a free operating system like Linux just to try to compete.

          Just remember that Linus created Linux because the UNIX licenses were too expensive (this was the early 90's).
          It was not created as an alternative to Windows, but an alternative to the expensive, proprietary UNIX versions. In that respect one can say that it has been a fantastic success.

      • by Anonymous Coward on Tuesday December 04, 2012 @01:45AM (#42176407)

        It's a free market.

        You might think only a moron would mod parent informative, but...

        Around 2007, Microsoft realised tech sites like Slashdot had a significant involvement in the very public rejection of Vista as a replacement for XP. They hired several reputation management companies, including Waggener Edstrom and Burson Marsteller to manage their online presence before the W7 release.

        One of the results of that was that the reputation mangers ran hundreds of sock-puppets in blogs and news aggregators, like Slashdot and Reddit. They swamped the discussions, including those unrelated to their OS with scripted comments based on a few themes - "Have you tried it yet?" "Much faster than XP" etc etc. There was no opportunity to discuss Linux/FOSS or any other non-proprietary effort without wading through dozens of highly moderated pro-Win 7 postings. Pretty much every first post was a Microsoft-favorable pamphlet.

        The result was that almost anyone with a real interest in tech abandoned the site. There are still a few of the old die-hards here, but it's mostly marketers and sock-puppets now.

        • Re: (Score:3, Insightful)

          Around 2007, Microsoft realised tech sites like Slashdot had a significant involvement ... mostly marketers and sock-puppets now.

          According to marketing, you have to repeat this message 7 times and people start to believe it. Of course variation in poster name and phrasing is a plus.

        • by jjo (62046) on Tuesday December 04, 2012 @08:28AM (#42177943) Homepage
          It really is a free market in enterprise computing, in the sense that Microsoft does have competitors. No one can deny that Microsoft has achieved strong customer lock-in, making it quite difficult to change, but Microsoft is now testing the strength of that lock-in in two ways:
          1. - Microsoft will surely lose some enterprise customers over this: the ones with the weakest lock-in. How many it will lose is difficult to predict.
          2. - New, growing companies just getting into enterprise computing are now fully on notice what to expect if they drink the Microsoft kool-aid. Even if they do not lose many existing customers, they Microsoft may be eating their seed corn here.

          Microsoft has built a towering edifice of customer lock-in, terrible to behold. Eventually, in the fullness of time, the edifice will fall. We may be seeing the start of that process.

  • by jsepeta (412566) on Tuesday December 04, 2012 @01:06AM (#42176253) Homepage
    corporations are more responsive than ever to finding and deploying alternatives to Microsoft software. let's hope this spurs more open source development.
    • by Patch86 (1465427) on Tuesday December 04, 2012 @04:32AM (#42177035)

      Normally I'd reply with some dry cynicism, but actually I have noticed a bit of a sea change in my company recently (my company being a big UK national). We're just kicking off a project to implement a big MS software suite (SharePoint and peripheries, as an upgrade). The Architecture guys are dead set on the MS solution, which is no surprise (and the right choice, considering our ecosystem and our appetite for change at this exact moment). But what is a surprise is how much push back we've had from Procurement (who are not techies). They've been pushing us, HARD, to source alternatives and do a full tendering process.

      I doubt it will come to anything, but it's the first time I've ever seen anyone with clout from outside of the IT department pushing against a Microsoft solution. If they have truly wised up and started to look at software sourcing with a bit more of a hard nose, future projects could be very interesting indeed.

  • by Anonymous Coward on Tuesday December 04, 2012 @01:07AM (#42176261)

    For Ballmer to keep his job, Microsoft needs to make a profit. Last quarter it made a loss, Ballmers excuse was a one-time write off. However Windows 8 is flopping, Surface is failing, and he needs to show a profit.

    So he's massively ramping up the prices for the locked in customers, in the long term, they'll move away from Microsoft products, but in the short and medium term, they'll have to bend over and take it.

    After Ballmer has run the company for 10 years and it's been in decline, you have to realize that astroturfers cannot save him, he needs to go. No more excuses.

    • by DoofusOfDeath (636671) on Tuesday December 04, 2012 @01:39AM (#42176387)

      After Ballmer has run the company for 10 years and it's been in decline, you have to realize that astroturfers cannot save him, he needs to go.

      Actually, given the way things are going, I'm quite content with him staying.

      • by wvmarle (1070040) on Tuesday December 04, 2012 @03:16AM (#42176787)

        Euhm well yes and no. As much as I'd like to see Dr Evil go, I'd even rather see Dr Evil lose their evilness, be cut down to size, and play nicely along with the rest.

        MS is a big company, it's never a good thing to see a big company fail, and not just because of the collateral damage it causes. MS going bankrupt (unlikely to happen any time soon considering how much assets they have, but just imagining) would, in short, be a disaster for this world. It would mean no more updates for Windows, and virus/malware writers would have the time of there life. There are no easy alternatives - Linux while a great alternative is by no means an easy switch, when you consider the taking along of all the user's existing data files and applications, many of which don't have a Linux version. OS-X is even worse as it requires complete change of hardware.

        Secondly, MS as a big company is one of the few that can actually form viable competition against Google and Apple. Competition that's badly needed to keep those two in check.

        And finally as a big company with all the money and brainpower that they have, they do have the potential to come with many innovations. The Surface is a good example of this, from the looks of it, it's a very nice device. Too bad their management can't make it really shine: too expensive, unappealing software.

        • by jenningsthecat (1525947) on Tuesday December 04, 2012 @05:46AM (#42177263)

          I'm not at all a fan of MS, but what you say makes sense and is reasonable to me. I don't understand why you've been modded down - if I had points left I'd mod you up.

          Maybe the sock-puppets and astro-turfers - and the shills on BOTH sides of the Win/Lin divide - modded you down 'cause you're obviously not among the faithful.

        • MS going bankrupt (unlikely to happen any time soon considering how much assets they have, but just imagining) would, in short, be a disaster for this world. It would mean no more updates for Windows, and virus/malware writers would have the time of there life.

          That's not how it works. When a large company goes bankrupt, it's assets are sold. In the case of MS, I suspect the Windows division would be split from Office, Xbox, etc. The buyer would naturally want to gain all those Windows customers, so they would be inclined to continue updates, etc. The situation could actually improve, with a new owner focused on a desktop OS, rather than the large number of products that currently compete for attention at MS.

          Westinghouse was broken up, and the different divisi

    • by sdnoob (917382) on Tuesday December 04, 2012 @03:15AM (#42176781)

      i'd be the last to defend ballmer, but that quarterly (4/12 to 6/12) "loss" was due to writing down the $6+ billion acquisition of aquantive.... which was stupidly bought (at a grossly overvalued price) while uncle bill was still in charge.

      without the writedown on the books, they would have made MORE than during the same quarter the year prior.

  • Economic Geniuses (Score:5, Insightful)

    by ryan.onsrc (1321531) on Tuesday December 04, 2012 @01:11AM (#42176271) Homepage

    I see: so if demand goes down, price goes up?

    Good luck with that ...

    • Indeed. Raising your core product prices by an extravagant amount, when you are flush with cash, because your most recent bet did not pay off, is dumb.

      MS putting out a stinker, in the form of Windows 8, will prevent customers from upgrading to this OS.

      MS raising their prices, because of this mistake, will cause their customers to look at other long term options.

      And the sad part, as I highlighted above, is that they are doing it purely to meet Street 'expectations.' Probably one of the more important follies

    • That's exactly how Bell thinks (Canada). Payphones are less and less used, and they're trying to *raise* the fees to 1$ (double of what it already is).

  • It does a number of things, some of them vaguely useful, but none as well as other stand-alone tools, it's awkward as hell, and people hate using it.

    Raise the price on it and even some of the most MS-centric IT shops will go "Fine, we'll just set up an internal Apache server and Confluence instead."

    • by CodeBuster (516420) on Tuesday December 04, 2012 @02:05AM (#42176505)

      Raise the price on it and even some of the most MS-centric IT shops will go "Fine, we'll just set up an internal Apache server and Confluence instead."

      You might think so, but remember that SharePoint is usually not purchased by the IT department. It's purchased either outside of the IT department for use by non-technical people, good luck with that btw, or it's forced upon everyone by clueless management at the urging of consultants who have a vested interest in plugging SharePoint as the "solution" to whatever "problems" management thinks exist. Microsoft should just change the marketing pitch to, "SharePoint is right for anyone with a credit card" because that's basically how they sell it. Anyway, it's only after the purchase has been made and the consultants are gone that people realize just how much SharePoint sucks. Of course by then it's generally to late too do anything about it because the expense of the project has blown the IT budget for the next three years. In fact, I've yet to hear of a SharePoint project that either delivered on its promises or didn't go way over budget, so raising the price can only makes matters even worse. For those of you out there who haven't experienced any of this, do yourselves a favor and push back against "PainPoint" or you'll regret it later guaranteed.

      • by shentino (1139071) on Tuesday December 04, 2012 @06:21AM (#42177411)

        There's a reason that MS markets to PHBs and not to IT ya know...

      • by JaredOfEuropa (526365) on Tuesday December 04, 2012 @07:34AM (#42177729) Journal

        Anyway, it's only after the purchase has been made and the consultants are gone that people realize just how much SharePoint sucks.

        The consultants leave at some point? When does that ever happen? That's another problem with Sharepoint: the cost to implement is high, but the cost to roll it out across the business and maintain it functionally as well as operationally, is unbelievable. This is a consultant's dream if you want your contract renewed for the forseeable future. (yes, I'm living the nightmare). Not to mention all the crap you have to deal with when you find, as a large organisation, that SP scales very poorly.

        But at some point the extra cost will get noticed, and even the PHB might concede that we're indeed better off with Drupal, Confluence, Mediawiki and a good document management system.

  • by asmkm22 (1902712) on Tuesday December 04, 2012 @01:16AM (#42176293)

    I'm a Microsoft guy through and through, when it comes to the enterprise. These licensing costs are just getting really difficult to justify. I know there's some open source replacement available, but it's not all very coherently tied together the way MS stuff is. I'd love to be able to move away though.

    • by DoofusOfDeath (636671) on Tuesday December 04, 2012 @01:56AM (#42176453)

      I think that was the point made in this story [semiaccurate.com]. Microsoft has worked hard over the years to make its systems not interoperable with others', so that customers had to buy the whole collection of enterprise services from just them.

      Now that their products are apparently a worse deal in some cases than competing products from other vendors and/or open source software, their all-or-nothing strategy is at risk of backfiring spectacularly.

      The tragedy, if one can call it that when Microsoft is suffering, is that this appears to be almost a play-for-play repeat of IBM's mistakes in the 1980's and 1990's, if I recall correctly. Microsoft should have seen this coming miles and miles away.

      • by Anonymous Brave Guy (457657) on Tuesday December 04, 2012 @02:32AM (#42176635)

        I think that was the point made in this story. Microsoft has worked hard over the years to make its systems not interoperable with others', so that customers had to buy the whole collection of enterprise services from just them.

        In fairness, they have also developed (directly or via acquisitions) a lot of the best software on the market over an extended period, and for much of that time they have also invested a huge amount in supporting developers at other software companies whose products would therefore get built on Microsoft platforms. One could debate how successfully they still perform either of those roles today, but their dominant position didn't happen by accident, and I don't believe for a moment that it's entirely or even mostly down to the much criticised indiscretions that led to antitrust proceedings and the like either.

        The thing is, while sticking with Microsoft platforms may bring benefits to businesses, sooner or later the cost will become too high and start to outweigh those benefits. Other things being equal, Microsoft still has the best software products in many of the markets it operates in, but other things aren't equal and apparently they're going to be even less equal now. On the other hand, maybe MS have done their homework, and rather than this being some sort of act of desperation, they have simply concluded that these products really are worth that much more than what they've been charging for them so far and by implication than any alternatives that might be available.

        • by Raumkraut (518382)

          Personally, I'd put Microsoft's initial monopoly down to:
          * Making "good enough" software
          * Getting their software pre-installed on computers
          * Achieving ubiquity before the Internet/networking really took off (software is easier when you don't consider security)
          * Bob

        • by Anonymous Coward on Tuesday December 04, 2012 @04:37AM (#42177055)

          When you say 'best products' and microsoft together, I have to stop. Its just not true. In a few instances their products are easier to use (although it can be argued that easy comes from years of familiarity), but when you said best, I had to stop. About 10 years ago, I had to support a microsoft based system. It was very important on this system that the time be correct. Lawyers would regularly subpoena records, unions, bosses and employees were very interested in correct database timestamps. Yet microsofts NTP protocol was very broken and the time would drift quite badly from machine to machine. Microsoft had no resolution, and suggested 3rd party applications. Considering the company I worked for bought at least $3 million in microsoft products annually, you would think they would be helpful. And you would be wrong. I've heard people complain for years about open source software and that there is "no one to choke" when bad things happen. Well, I know that you are no better off with microsoft. I KNOW! When their license says 'no warranty either express or implied', that's what they mean, and that's the way things turn out. If I make it sound like life and death, that's good, because that's what it was: an emergency 911 centre. And their software was in use, and broken most of the time. Don't say microsoft and better to me. Don't do it. Its a bold faced lie.

  • by denis-The-menace (471988) on Tuesday December 04, 2012 @01:21AM (#42176315)

    in the 80s various flavors of UNIX locked their customers' data in expensive licensing deals.

    then one day, windows NT came out and showed a cheaper way. around the same time Linux also came but only a few saw Windows as just another trap.

    Now we have a prophecy realized.

  • Australian prices (Score:5, Informative)

    by mjwx (966435) on Tuesday December 04, 2012 @01:36AM (#42176369)

    Microsoft has increased user CALs pricing 15 per cent; SharePoint 2013 pricing by 38 per cent; Lync Server 2013 pricing by 400 per cent; and Project 2013 Server CAL by 21 per cent."

    Allow me to translate, for Australian license partners,

    Microsoft has increased user CALs pricing 45 per cent; SharePoint 2013 pricing by 114 per cent; Lync Server 2013 pricing by 1200 per cent; and Project 2013 Server CAL by 63 per cent."

  • Excellent (Score:5, Funny)

    by Tough Love (215404) on Tuesday December 04, 2012 @01:45AM (#42176409)

    These idiots who didn't see it coming from miles away deserve to be squeezed by these assholes.

  • by kawabago (551139) on Tuesday December 04, 2012 @01:48AM (#42176425)
    They raise prices and drive more business away. Does Ballmer think he's running a phone company or something?
  • by Anubis IV (1279820) on Tuesday December 04, 2012 @01:48AM (#42176429)

    "Tired of holding sway over a group of clients who have remained steadfast in their use of Microsoft products, the tech giant is doing all it can to give them reason to leave the fold by incentivizing alternatives and souring relations."

    I mean, seriously, Microsoft? In the face of a less-than-expected level of consumer response to your recent flagship products, you decide to punish your remaining, loyal client base by raising their prices at a time when viable (and oftentimes cheaper) alternatives are becoming available and are being adopted in greater and greater numbers? This makes no sense.

    When will Ballmer be kicked out already? Microsoft has smart people working there. If someone actually managed to clean house and eliminate all of the ridiculous middle management they have, I wouldn't be surprised if they could start putting out some decent stuff again. And, I'm saying that as someone who lumps himself in with Apple fanboys. I want to see Microsoft strong again and making products that people actually consider instead of scornfully rejecting, but I want to see them earn that spot through innovation and good design.

  • by Bomarc (306716) on Tuesday December 04, 2012 @01:52AM (#42176451) Homepage
    As a small business owner, I was looking to implement SharePoint Server. I've downloaded the evaluation, getting the hardware together (have the server, need the drives/more RAM). Now I see that this already bloated {overpriced} software is going to go up by 38%. I don't know where I'm going to turn to, but it was on the outside edge of what I could afford. Now, to research the market for other options. Viable suggestions would be appreciated. Is it time to add a section to Slash that would have replacement recommendations options or for overpriced [MS] software?
    • by MightyMartian (840721) on Tuesday December 04, 2012 @02:54AM (#42176727) Journal

      We've been using Alfresco's community edition. It has AD integration and does an okay job with Sharepoint protocols.

  • by Barlo_Mung_42 (411228) on Tuesday December 04, 2012 @02:07AM (#42176521) Homepage

    Both have only been out for about a month. It's too early to really tell how either of them are doing. It also takes time to make decisions about pricing.

  • by Branka96 (628759) on Tuesday December 04, 2012 @02:20AM (#42176573)
    This is an Indian news site. You have to ask yourself how much is due to changes in the exchange rate? I think at least some of the increases could be attributed to that.
  • Short term gain (Score:4, Insightful)

    by EmperorOfCanada (1332175) on Tuesday December 04, 2012 @03:15AM (#42176783)
    First I have to comment on the huge number of at least acceptable comments above that were modded down to 0. Very odd, but it seems that the pro MS down modders ran out of karma points after the first few dozen anti MS posts.

    I have said it before: MS is doing nothing to bring me back. I like MySQL better than SQL, Apache better than IIS, CentOS command line better than Server, Mac OS X better than any windows. I haven't used Visual Studio in long enough that I can't compare it to XCode. On my Mac I can run all my critical commercial software plus it mostly reacts like Linux so another strike against MS. I use my xbox for gaming and it smells like Linux might become a force in gaming (to be seen). I think that I am a pretty typical geek in that I have an xbox as my only MS product. Now most corporate types are on Windows but that is often because they have WidgetManager 2000 running on all their XP systems. I have even seen corporations that have to play all kinds of games to buy new machines and get XP onto them legally so that their old crap keeps working. Few of these companies have managed to make the Linux desktop transition for the first reason of legacy software but for the second reason of MS Office. I don't personally use it but in a corporate environment OpenOffice just doesn't cut it. But the moment some group gets together and ports the OpenOffice code to C++ awesomeness will happen. My favorite word program for Mac is Bean. It is C++ and rocket fast. It doesn't do much but that is a feature.

    So looking at Microsoft as a tech professional I would never in a zillion years recommend that a new corporate system be based in the MS world and I suspect that there is a horde of non MS people making the same consistent recommendations to various companies. Many of these companies don't change because of inertia but one of the things that slows down an object moving by inertia is friction and this price increase will add to the MS friction. I doubt that there will be a huge wave of people vomiting out MS from their company due to this smallish increase. What there will be is a slight increase in the trend of people using non MS products. In the corporate world it is usually the negative trends that get you. People didn't stop using film overnight but Kodak couldn't get ahead of the trend and Kodak basically invented the digital point and shoot.

    I don't hate MS but it gives me zero reason to love it yet I remember the days when I did. Visual Basic (before .net) was a great way to make quick windows applications and for a while it got better and better. Then Visual Studio made Windows C++ programming way easier than that Borland C++ ever did (OWL was crap). These were products made to make my life better and they did. The impression I had of MS in the past was some hot shit programmers crowded around chalkboards, terminals, and doing the cool. Now my impression is that the programers are all third rate and completely beaten down by layer upon layer upon layer of useless middle and sort of upper middle managers. Now the only goal at MS seems to get a little revenue goose to impress their shareholders for 5 minutes. I doubt they will be as impressed in 5 years.
    • by iampiti (1059688)
      OpenOffice and LibreOffice might be too slow for your taste but both are mostly written in C++. Not that it undermines your point but just wanted to clear that misconception
    • I'd strongly argue that OWL was not crap. It was indirectly hindered by MS, which is what caused the frustration.

      Remember that it was a brutally different time back then, when MFC was the most important thing to MS and the Windows codebase was tweaked to strongly favor MS products. Borland was at the complete mercy of Microsoft's shenanigans. As were many other companies in many other dev segments. But from a technical perspective OWL was certainly a much cleaner oo framework than MFC (imho).

  • Stupid (Score:4, Interesting)

    by Charliemopps (1157495) on Tuesday December 04, 2012 @03:16AM (#42176785)

    Microsoft are fucking idiots. Every enterprise customer they have already wants to get away from them, but the cost of migration is just too steep. What they did here was change that... even if the new rates still keep the cost bellow some threshold that would make it easier to migrate to something else, what they've really done is say to all their customers "We will price gouge you in the middle of a recession" and you can bet every IS/IT department in the country is going to be having meetings regarding just how quickly it'll really take to get out from under the chains of .NET

    The android desktop OS is coming... we all know it. It'll be free and Google will have hordes of experts ready to fly out to your site and help you migrate... then what Microsoft?

    • Re:Stupid (Score:4, Insightful)

      by N1AK (864906) on Tuesday December 04, 2012 @04:53AM (#42177101) Homepage

      Google will have hordes of experts ready to fly out to your site and help you migrate... then what Microsoft?

      Gold will flow from springs, mana will pour from heaven and pigs will learn to levitate. Google's customer service is fucking appalling* for just about all its services; you'd have to be smoking some heavy duty crack to think any desktop release they'll do would look anything like that, as would the people who modded it up.

      *Said as a massive Google product fan; they power most of what I do in terms of hardware and software.

  • by smash (1351) on Tuesday December 04, 2012 @03:17AM (#42176791) Homepage Journal
    Move CIFS shares to my netapp, move email back to a nix box, encourage users to jump to tablets, macs, or nix workstations (all of which are easier to support than Windows).
  • Does not mean much (Score:5, Insightful)

    by damaki (997243) on Tuesday December 04, 2012 @03:20AM (#42176797)
    As massive licence buyers are heavily negotiating the official prices, we won't get a Linux landslide... do not expect those prices to be applied to governments or big companies.
  • Ha ha ha (Score:5, Interesting)

    by slashmydots (2189826) on Tuesday December 04, 2012 @10:06AM (#42178539)
    We saw this coming and bought 100% of our replacement servers and OSes and CALs and Exchange and Exchange CALs on Nov 30th. We're migrating from 4 older servers down to 2 so this just made up speed up and buy em at the last second instead of waiting 2 more weeks. Take that, Microsoft.
    Also, others' claims above aren't far off about companies actually switching. We NEED certain MS-only enterprise apps but at $453 a piece for Office Pro Plus OLP, guess who's testing Libre Office Base with our Access databases this week.

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