Article

Software Assurance deserves a second look, analysts say

Margie Semilof

Microsoft has done much to improve the value of its Software Assurance licensing program in the two years since it was unveiled.

But many customers remain convinced that the program will

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cost their companies too much money, and they continue to be unaware of freebies that Microsoft has added to make its program more attractive, according to industry analysts who have tracked the company's licensing program.

The analysts, who participated in a Microsoft-sponsored webcast on Wednesday, agreed that customers who were initially turned off by Microsoft's Software Assurance program should re-evaluate the program in the wake of new enhancements added in September. Among the perks are some free e-learning, training and home-use privileges.

Microsoft has said that it will continue to improve the program. In January, it plans to add "solution accelerators" for Office, which include templates and tools for finance, human resources and sales, said Cori Hartje, director of marketing and readiness for worldwide licensing and pricing at Microsoft.

In many cases, customers who are aware of those benefits still don't have a good idea of how they can be leveraged, said Al Gillen, a research director at International Data Corp., Framingham, Mass. Gillen added that 47% of the clients he speaks with still don't fully understand the Software Assurance program.

For the most part, customers have formed strong opinions about Software Assurance, the portion of Licensing 6.0 that governs software maintenance. Alvin Park, a research director at Gartner Inc., a Stamford, Conn., consulting firm, said that his clients fall into three camps. One includes those who purchased Licensing 6.0 because they were due to upgrade anyway. Another third chose to just buy Software Assurance for their mission-critical products, like SQL Server and Office.

And about a third of his clients still have not bought Software Assurance. Initially, they didn't think it was worth the price and are waiting for word that something has changed. But the program's value differs depending on an individual company's needs, the analysts agreed.

The panel also included Julie Giera, research fellow at Forrester Research Inc., Cambridge, Mass., and Laura DiDio, a senior analyst at the Yankee Group, Boston.

Park said that each company needs to consider its own infrastructure and road map to determine which products should have Software Assurance coverage and which should not.

"If you use a desktop system for four or five years and then replace it, you may be in a position to replace the [operating system] with the client when you buy it, but you may want Office on top of it," he said. "So, you may want to have a mix and match."

Customers should look at the new enhancements and assign a value to each. "You can put a price on e-learning, on home-use rights and on TechNet [Microsoft's online technical support center]," he said. "You can see how much value there is to your organization."

DiDio said that her firm polled customers about Microsoft's new licensing program both before and after a software upgrade. In early surveys, about 90% of the 5,000 customers polled said that they expected a price increase of 30% to 50%. After going through an upgrade, most customers said they actually saw no changes in the cost of their Microsoft software, and some actually saw a decrease in costs, she said.

FOR MORE INFORMATION:

Article: Licensing 6.0 and Software Assurance: Who should renew?

Interview: Understanding volume licensing

Best Web Links: Licensing


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