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Microsoft Sweetens Sour Licensing Scheme

June 26, 2003
By Sean Doherty

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Engineers may still believe that technology sells products, but businessmen and lawyers will tell you otherwise. You need to put the technology in a product, license it and couple it with a service.

A case in point is Microsoft's Software Assurance (SA) program, to which the vendor has recently added tools, training and support.

Microsoft has been pushing the program for more than a year as an add-on to its Enterprise Subscription Agreement and other volume-licensing programs. SA aims to reduce the costs associated with acquiring new versions of Windows. It entitles you to new software releases as they become available. What's the catch? Cash. For any Microsoft server product, SA costs a quarter of the license price for each year of coverage. For desktop products like Windows XP and Office, it costs 29 percent of the license price. Whether you call this insurance or assurance for software upgrades is a semantic question. Does it work is a better question.

At its base, Microsoft's improved SA includes the rights to new versions and e-learning training materials. After that, SA features depend on your volume-license program and whether the product is destined for a server or desktop. SA for servers includes Web-based support. But you need to purchase SA for each of your Client Access Licenses. For large enterprises with multivolume licenses, SA can let you spread payments over annual periods and includes subscriptions to TechNet Plus, telephone support during business hours and access to the Windows Pre-Installation Environment.

These changes reflect the fact that with a license, products take on the characteristics of services. But realize that SA mostly benefits big customers. For smaller companies, licenses are negotiable. If SA makes sense for your enterprise but it does not quite fit your budget or your culture, see if Microsoft is willing to cut a deal. And when you get to the table, know that both your options and the door are open.

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