Software Assurance is the maintenance portion of Microsoft's licensing program -- the part everyone loves to hate -- and next month it will receive its second major revamp in as many years.
Industry experts have been told by Microsoft that this second round of improvements to be unveiled on Sept. 15 will be "significant."
"I expect that these changes will be fairly major in an attempt to improve the value of Software Assurance so that customers would want to buy it irrespective of whether or not they get a version upgrade during the contract term," said Alvin Park, an analyst at Gartner Inc., in Stamford, Conn. "It's always an issue with customers, whether or not they will get access to a new version of the product, no matter what agreement they are in."
Park has said Microsoft should consider improving the tech support portion of the offering to something on par with what other software companies have. For instance, Oracle Corp. and IBM give 24-hour telephone support to customers with paid maintenance agreements. But Park said he also believes that Microsoft does not have the support organization in place to handle the increased calls.
Microsoft might consider another possibility, which is to give customers a software upgrade guarantee. Microsoft does not guarantee a next upgrade. "I don't expect them to do that, but it's one of the things we have said that would make Software Assurance more attractive," Park said.
The Software Assurance program, which is now three years old, is offered as part of Enterprise licensing agreements signed by large customers with somewhat standard-sized environments. But it is an option for customers with Open and Select licensing agreements. Open agreements are for customers with fewer than five licenses. Select agreements are for customers who can forecast the number of licenses they will need.
Favors for dotted-line signers
The idea behind the program is that only customers who subscribe to Software Assurance get the right to upgrade to new products at a reduced price. All others without this maintenance agreement will have to buy a new license at the full price.
Software Assurance has never been popular with IT executives and financial managers who have long considered it nothing more than a price hike. To counter this sentiment, Microsoft responded with a smattering of incremental upgrades and perks, with one major wave of enhancements two years ago that included training, support, disaster recovery and home use rights.
IT customers still simmer over the cost of SA despite improvements added to the program. Stephanie Trowbridge, an administrator who handles licensing for Boston-based Northeastern University, said she would like to see support service similar to other software vendors. She would also like Microsoft to be more flexible in terms of how it calculates SA renewal dates compared with overall licensing contract dates.
Northeastern University has both a Campus agreement and a Select agreement with Microsoft -- the Campus agreement based on head count and the Select agreement based on product purchases.
Microsoft did make some minor changes to its licensing program for small and medium-sized business customers in July when it created a single, worldwide Open Value licensing program. For some of these businesses, any change to the program may be too little too late.
Dan Lein, an IT administrator at American Engineering Inc., an Arlington Heights, Ill. contractor, said he initially purchased Software Assurance for his small consulting business because he felt it was presented in a manner that left him no choice. His small business has since restructured and cut its staff size from 200 to 40 users and reduced its number of Windows licenses from 25 to eight.
"If I could get something like 24-hour support, it would be a huge advantage to someone like me," he said.
Lein has taken advantage of the added technical support and training programs. But his company, though smaller now, will grow again. And next time he might make a switch when he has to make a major operating system purchase. "My users are fewer and the rollout would be less painful," he said.
"OpenOffice might be a good solution," he said of the open source office suite. "I'm not sure if it will be cost effective, but it's something I am considering."