News

Microsoft Sweetens Licensing 6.0 Pot

• By Scott Bekker
• May 28, 2003

Software Assurance (SA) is the upgrade-right component of Microsoft volume license agreements. When Microsoft implemented Licensing 6.0, the company eliminated several previous upgrade options in favor of the subscription-like SA model, which has customers pay a percentage of the software's cost every year (25 percent of server software, 29 percent of desktop applications and operating systems).

Amid complaints that SA offers fewer benefits for companies at a higher cost than similar programs from competitors like IBM, Oracle and others, Microsoft on Tuesday announced several new services, programs and rights that will be offered to SA customers without additional charge beginning in September.

The new benefits for SA customers are free technical support during regular business hours, employee home-use rights for Office System products, Web-based technical support resources, access to e-learning resources and vouchers for employees to attend training courses at certified technical education centers. Organizations will need to check on the Microsoft site to make sure each component of the program applies (www.microsoft.com/licensing). Some of the benefits apply to certain volume licensing programs and not others.

Analyst Alvin Park at Gartner says organizations that haven't bought Software Assurance in the past should re-evaluate. "The biggest benefits appear to be free home use of information-worker applications and telephone support for enterprise editions of server software," Park wrote in a Gartner research note on Microsoft's announcement. Park says the value of the other components of the program will vary widely by organization.

Although the new Software Assurance program offers free phone support, Microsoft continues to hold down the level of benefits in order to retain a market for premier support. Premier support extends telephone technical support to 24 hours a day, seven days a week and includes non-enterprise editions of server software.

The adjustments are the latest in a line of reactive changes, prompted by customer anger, to the two-year-old program. Microsoft first delayed implementing the program two times and in the last few months introduced a number of minor changes in programs and general licensing options.

"Over the past 18 months, as we introduced a number of changes within Licensing 6.0 along with the rollout of Software Assurance, we definitely recognized that we didn't communicate those changes very effectively," Bill Landefeld, vice president for worldwide licensing and pricing at Microsoft, said in a statement.

One primary problem, according to Landefeld, has been a failure to coordinate with and train channel partners and the Microsoft sales force on the changes. He says that problem has been fixed now.

Landefeld also vowed that the latest round of changes would not be the last.