Friday, January 27, 2012

SOP Friday: Software Upgrade Policy

I wrote awhile back about Activating and Registering Client Software and Hardware. And I wrote a few weeks ago about your Hardware Replacement and Upgrade Policy. This is a very different Software topic.

You need a policy (or at least a philosophy) about software upgrades, even if you don't sell software. Because it is central to the success of our clients, we need to give them good guidance. Here I'm going to address three topics regarding software upgrades: Philosophy, What you sell, and patching.

Software Upgrade Philosophy

Perhaps the most important message you can send your clients about software is a consistent approach to upgrades. When something's new, the only decision is whether to buy it. But when it gets older you have to decide what to do about "generations" of software. I'll use the Microsoft office suite as my primary example since it is in most client offices.

Clients inherently know that life is easier if everyone has the same version of Office. This is particularly true of older software. Office XP and Office 2010 are not compatible. You can open Office XP docs in 2010, but you have to "save as" the old format in order to open with XP again. Once someone updates the file, it's all over.

Macros are particularly troublesome since Visual Basic also changes with each software generation.

Even things that are supposed to be 100% compatible are not. In our book business, we have seen that complicated documents we save in Word 2010 have problems opening successfully in Word 2007, even though they are supposed to be the same format.

Realistically, many offices cannot afford to upgrade everyone's Office Suite just because one person got the new version. Having more than one version can cause a serious reduction in productivity for some offices. Each has to decide what it's worth. As a result we're okay with skipping a generation. This makes the upgrade process more affordable. And, if the client buys open licenses, they can legally install the current version or the most immediate previous version. So staying in sync is easy and doesn't cost more.

Ideally, we like clients to agree to only skip one generation. Look at your own clients. The handful with "that one" Access 97 database have a hundred times more trouble with Microsoft Office issues than any of your other clients. They don't see the difference because they only see their office, but you see the difference all the time.

When companies commit to only skipping one generation, it means they have to shell out some money up front for new software every five years or so. But in the long run, they definitely save money. So you have to work to convince them to keep up with the upgrade policy. And, whenever a new version of Office is released, you have to remind them of the "best practice" in this area.

Another important policy is to match up the hardware generation with the operating system generation. For example, we will not install Server 2003 on new hardware. Period. It doesn't have the right drivers. It might not recognize some of the new components. It certainly can't take advantage of the newer features (in this example, 64 bit processing).

By the same token, we won't put SBS 2011 on a five year old machine. We don't want to install a 2011 operating system on any machine older than 2011. The hardware won't be beefy enough. It won't have all the components to take advantage of new features (like hardware-level virtualization). And it often can't be upgraded to provide reasonable performance without a huge cost. See my article on Hardware Replacement and Upgrade Policy.

Summary: Pay attention to the software "generation" and develop your philosophy about upgrades. You need to balance client needs with costs. For us that means it's okay to skip a generation, but don't skip two generations. And we like to see the hardware and operating system from the same generation.

What You Sell

We have three primary policies about what we sell regarding software.

First, we sell the latest operating system.

Second, we decide between OEM and Open Licensing depending on the client's needs.

Third, we sell other upgrades when they're really needed.

Many year ago I was asked to give a second opinion to a prospect. They had purchased several new computers, which shipped with the new Windows 98 operating system. Their "consultant" had quoted additional software costs and labor to remove the Windows 98 and install Windows 95. His reasoning: Windows 95 is stable and no one ever trusts the first generation of a Microsoft product.

The client asked me what I recommend. Of course I said that I would never replace a brand new O.S. with something that's three years old and based on old technology. This amounted to a consultant who only knew one O.S. and was afraid to support the new one. That's just an unsustainable business model.

We sell the latest operating system. That means Windows 7. That means SBS 2011. Even in the days of Vista, we sold Vista. Techno-goobers and pundits didn't like it, and it was a P.R. nightmare for Microsoft. But as an operating system, it worked great.

When you don't sell the latest operating system, you deprive your clients of many new features, and you increase their overall support costs.

We don't upgrade just to upgrade, but when we sell a new computer, we always choose the latest operating system. Through the whole fiasco of trying to make Windows XP live forever, we simply sold the latest, greatest, and most secure operating system available. That policy never steered us wrong.

As for OEM vs. Licensing, we have changed our tune. We used to drink lots of Microsoft Kool-Aid and push licensing. And for many clients it made a lot of sense. But for smaller clients, Open Licensing has fewer advantages.

Here's the argument for Open Licensing from Microsoft:

1) You get the latest office suite (or operating system). If you want to use the previous version, you could install that as well.

2) You have a perpetual license so you never have to un-install the software.

3) If you buy two years of software assurance, you can get the next version at no additional charge if it's released during that 2-year period.

4) Legally, you can uninstall the software from one system and install on another. So, if your hard drive or mother board fails, you can legally install this software on another machine. You can't do that with OEM. It dies when the machine dies.

Open License makes great sense for larger organizations. You can deploy it en masse and know that everyone is legal. You can maintain consistency throughout the organization, which saves more money over the long run in large companies. Re-installing as needed is simple and you don't have to worry about whether its legal. Overall, management and maintenance is easier with Open Licensing.

With OEM, the key drawback is that you're buying something that will die. Not might, will die. It lives with the machine. So despite client claims that they can do whatever they want, they can't. Luckily, Microsoft licensing authentication has gotten very good, so you spend less time convincing clients that you can't break the license agreement for them.

The key advantage to OEM is that it's a lot cheaper. A secondary advantage is that you can sell one license at a time. Open has a five-license minimum.

With regard to price: When you sell OEM, you have to tell the client that it's a bit of a gamble. As long as the machine lasts, they can use that license. If the machine lives ten years, they can use that license for ten years. Since you only sell business class machines with a three year warranty, they are guaranteed at least three years of life. But if the machine dies in the fourth year, they have to buy Office again. For most clients this is a complete non-issue. Even if they keep the machine for five years, the chances that they will have a failure that requires the purchase of another copy of Office is pretty slim.

With regard to the five-license minimum: For really small companies that buy 1-4 computers a year, they will have a tough time staying eligible for the Open Licensing unless the office licenses are bought at the same time as the SBS licenses, and they have software assurance so that they can add additional licenses for two years. This becomes a simple math problem. And a pain in the neck when that Software Assurance expires.

The bottom line is that OEM is usually the best choice for very small clients and Open Licensing is better for larger clients. The big exception would be small clients who are Not-for-Profit organizations. They can use Tech Soup to get software at extremely low prices, so they can afford to buy 10 or 15 copies and be legal everywhere.

Patches, Fixes, and Updates

Finally, we get to patches, fixes, and updates. This one is pretty easy: Install 'em! Unless there's a major reason not to, we install all the latest patches, fixes, and updates. This is true for operating systems and software.

Just do it.

Most updates are minor and only affect microscopic pieces of the overall code. These are delivered via Automatic Updates or by manually running Windows Updates. We use Zenith RMM (Continuum) to push the most important updates. They currently deploy security updates, but will be expanding to additional updates as well.

I know some people freak out about every update that comes along. But realistically, 99.999% of the time, nothing bad ever happens. So we don't have a policy based on the exception to the rule. We have a policy based on the rule: Apply the latest updates.

The reason is extremely simple. Call tech support (for Windows, Office, QuickBooks, or any other program). The first question they ask is whether you've applied all the latest updates. If the answer is no, then they say to go apply those and call back.

You do the same with your clients. It's amazing how many issues simply go away (or never appear in the first place) when you have all the patches, fixes, and updates installed.

Just do it.

And what about Service Packs? Well, those do make us a little nervous. But not too bad.

I'm old enough to remember NT 4.0, Service Pack 6a. How much does it suck to have the latest Service Pack be a re-release of the service pack with a minor fix? It's a huge flag that says, "Let others try it first."

Microsoft has flip-flopped about service packs. In the first place, they were intended to be a collection of all the paches, fixes, and updates for the operating system or software. But then they went through a phase of adding serious functionality. Then they removed some functionality due to lawsuits. Then they went back to only providing updates. Then they made a few exceptions to that.

Then, they invented the "roll up" so that the latest version of NT 4.0 is not SP6a, but SP6a plus the latest roll-up. (Shoot Me Now)

So . . . Here's our policy about these major Service Packs, Feature Packs, and Roll-ups: Wait for about a month after they are released. If the world does not come to an end, then schedule installs for all clients. These updates are never critical. After all, they contain mostly old patches, fixes, and updates that you've already applied. They just make it much easier to get all the latest stuff installed quickly and in an orderly manner.

Once in a great while there's a problem. But for the most part, service packs these days are uneventful. So be diligent, but don't be afraid. Give it a little time to see if there are problems, then go ahead and install.

- Implementation Notes -

As with all policies, you first need to spell out what you want to do with regard to software upgrades, and what your philosophy is. Write it down. Explain it to your team.

You also need to add these policies to your constant communication with clients. Put it in your newsletters. Add it to your discussions when you sell software and deliver new PCs.

Make sure everyone on your staff is promoting your vision about how software upgrades should be handled.

There are no specific forms for implementing this SOP. You might write up a brief description of the procedure and put it into your SOP binder.

This kind of policy requires that everyone on the team

1) Be aware of the policy

2) Practice the policy

3) Correct one another's errors

4) Support one another with reminders

Your Comments Welcome.

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About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

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Next week's topic: The First Client Visit


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  1. Hi, Karl.

    Great article. As always.
    One mistype: "OEM has a five-license minimum."
    I guess it should say Open instead of OEM.

    Thanks again for sharing your knowledge

  2. You are correct!
    Thanks for the feedback.


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