Microsoft Refines Software Assurance for 2006

by Alex Woodie

Microsoft's Software Assurance customers will gain access to a slew of new training and professional services, including 24x7 phone support and extended hotfix support, as part of changes to the customer support program that Microsoft unveiled last week. However, when the new iteration of Software Assurance becomes available next March, only customers who sign Software Assurance contracts will be able to use new specific versions of Windows Vista and Windows XP, which may boost Microsoft's revenues, but could also alienate customers.

Microsoft's Software Assurance program, which it introduced in 2001, replaces traditional product licensing and annual support agreements with multi-year contracts that promise customers access to an array of technical support, maintenance fixes, and product upgrades. While it provides more of a predictable revenue stream for Microsoft--something that all software vendors are looking for these days--Software Assurance has also been a source of customer criticism for Microsoft. These criticisms often center on delays Microsoft is having in getting products, namely Windows Longhorn, out the door, and the possibility that customers will have to pay Microsoft more if their support agreements expire before new versions of software become available.

Next March, Microsoft will introduce major changes to the Software Assurance program that address some of the concerns that have been expressed by customers, but also open up a new avenue of potential resistance from customers.

The new Software Assurance program will include 18 defined "benefits" across the five phases of the software lifecycle, which include: planning; deployment; use; maintenance; and transition. This is an increase of eight benefits under the existing plan. There are no new benefits in the planning stage.

In the deployment stage, there are two new benefits. The first is Desktop Deployment Planning Service, which provides customers with one to 10 days of onsite or remote assistance from certified IT professionals to help them upgrade their Windows and Office environments. The second offering, called Information Work Solution Services, provides one- and two-day workshops to help customers get the most out of Office.

There are also two new benefits in the "use" stage, including a biggie: Windows Vista Enterprise, the new high-end version of the desktop operating system, will only be available to customers who sign Software Assurance contracts. Vista Enterprise will bring new security features like Full Volume Encryption and new virtualization features like Virtual PC Express (although Virtual PC Express will be available before Vista ships in fall 2006, according to the company). Customers with 30,000 or more client licenses for Office or Vista will also get new training vouchers as part of their Software Assurance contracts.

In the maintenance area, Software Assurance customers will gain access to a 24x7 telephone hotline staffed by Microsoft employees that it has dubbed Problem Resolution Support. Microsoft says it will provide support for "all server editions and Microsoft Windows-based and Microsoft Office applications" with this offering, which was created as a result of customer feedback, Microsoft says. Customers who currently use Microsoft's Services Premier Support can transition to a Premier Problem Resolution offering, which promises a higher level of support, and a more personalized relationships with a technical account manager at Microsoft. On the server side, the unlimited Web support available today for Software Assurance customers who have signed Enterprise and Select agreements will be extended to Open Value customers, the company says.

Finally, Microsoft will introduce three new benefits in the transition offering, including Windows Fundamentals for Legacy PCs, which formerly went by the codename "Eiger." Windows Fundamentals will provide a version of Windows XP Embedded with Service Pack 2 that will run on older PCs. Some applications, such as Internet Explorer, will run on the older PCs under Windows Fundamentals, while others will be hosted on a server and streamed down to the PC, effectively turning those PCs into a hybrid desktop and thin client. There is also a new Enterprise Edition Step-Up license that will allow customers to move from the standard version of a product to the enterprise version while paying only the difference between the cost of the licenses. Lastly, the changes implemented next year will include Extended Lifecycle Hotfix Support, which provides customers on Premier or Essential support agreements an additional support agreement with Microsoft to obtain hotfixes for older products. Extended Lifecycle Hotfix Support was introduced in July.

As is always the case, customers should look carefully at the exact terms of Software Assurance offerings, compare it with traditional licensing, and decide if the multi-year support program is right for them. Undoubtedly, it is the correct choice for many large businesses with complex environments, but smaller companies with simpler Windows environments may find themselves overpaying.