Microsoft Expands Software Assurance

Microsoft is expanding its Software Assurance software upgrade plan to appease customers who complain that the plan costs too much and offers too little.

From September 1 forward, Software Assurance will include (depending on the product, license type, and number of licenses bought) support, training, software installation tools, rights to use the software at home, and discounts on other Microsoft products, Microsoft said Tuesday. Currently, Software Assurance offers only the right to use the latest version of the software bought.

Microsoft introduced Software Assurance in 2001 together with Licensing 6.0, a revamped volume licensing program. Analysts and users blasted Licensing 6.0 and Software Assurance as nothing more than an ordinary price hike.

"We are responding to our customers, who were asking for more value in Software Assurance," said Rebecca LaBrunerie, worldwide licensing and pricing product manager at Microsoft. "We learned our lessons with Licensing 6.0."

Microsoft's Mea Culpa

The additions to Software Assurance follow talks with more than 2500 Microsoft customers around the world, LaBrunerie said.

Microsoft is trying to make good after angering some customers with the changes to its licensing terms, said Laura DiDio, a senior analyst at research firm The Yankee Group in Boston.

"Microsoft is making a public mea culpa, a public acknowledgment of the missteps it made two years ago when it announced Licensing 6.0," she said.

The changes to Software Assurance are designed not only to address customer complaints, however. Microsoft hopes that more customers will buy into the plan now that it has some added features, LaBrunerie said. "We hope that with these additions even more customers will look at Software Assurance," she said.

Additions to Software Assurance were necessary to get customers interested and to bring the program up to par with software maintenance plans offered by other software vendors , said Steve McHale, a Toronto-based vice president of research at IDC.

"Microsoft is trying to accelerate the adoption of Software Assurance by adding more to it than software updates. Microsoft needed to beef up that package," McHale said.

Good for Business?

What Microsoft is adding to the package is significant, according to DiDio, who identified the most valuable additions as access to TechNet, support, online learning, and training vouchers. TechNet, Microsoft's online resource for IT managers, includes discussion groups and offers online one-on-one chats with experts.

"The sum total of what they are giving you in this goody bag adds considerable business value. It is worth about $10,000 to a business with between 100 and 200 end users. To a very large organization this could potentially be worth millions in free stuff," DiDio said.

Microsoft's main volume license types are Open License, Select License, and Enterprise Agreement. Software Assurance comes standard with the Enterprise Agreement, but customers must pay a percentage of the license fee per year to add the service to the other two licenses.

The Software Assurance extras a user will receive depend on the product being licensed, the license type, and the number of licenses bought. Microsoft will post a chart on its Web site later on May 27 detailing who gets what, a spokesman said.

Bringing It Home

All Software Assurance subscribers for Microsoft's desktop products qualify for the new Home Use Program, under which any employee of a company that signs up for Software Assurance can get a copy of the software to use at home, for the cost of shipping a CD, Microsoft said. Users won't be allowed to take home the CD they use at the office, however, and employees must order the CD for home use from Microsoft.

The free support comes with Software Assurance for server products only. Telephone support during business hours is reserved for those who purchase Enterprise Editions of the server products--and even then it's only for customers with certain license types, Microsoft said. The support covers problem resolution only and won't replace "mission critical" support or any extensive support contracts that customers already have now, Microsoft said.

Desktop software users can get some support through TechNet, Microsoft said.

Although the additions to Software Assurance are "a very big first step," Microsoft can do more to reconcile differences with its customers, DiDio said.

"You don't win trust back overnight. Microsoft has a lot of work to do to regain customer trust and confidence," she said.