Microsoft Gears Up Software Assurance Changes

The software giant prepares to alter its Software Assurance upgrade protection program again, offering concessions to customers caught flat-footed by its decision to differentiate applications in the 2003 editions of Office.

Subscribers to Microsoft's Software Assurance program can look forward to some new licensing options for the Office System on Monday, Sept. 1, as the software titan tweaks the program again in response to customers' concerns.

The latest tweaks will allow customers who buy Microsoft products through OEMs to sign up for the Software Assurance program. Originally, when Licensing 6.0 launched, application product licenses acquired through the OEM channel were not eligible for upgrade protection through Software Assurance. The tweaks also add a limited-time program that will allow customers to alter their licensing schemes in the wake of Microsoft's newly aired decision to differentiate applications in the 2003 editions of Office.

"With the 2003 release of the Microsoft Office System, Microsoft chose to introduce a new product differentiation and enhancements in the capabilities of the Professional versions of both Project and Office Professional Suite and its individual programs," a Microsoft spokesman told internetnews.com. "Microsoft understood that some Software Assurance customers who had purchased the Standard Editions in the past may have made a different purchase choice had they known at the time of purchase about Microsoft's plans to offer differentiated applications in the 2003 editions."

Office Standard edition customers who want to take advantage of the changes have two options:

  • They may choose to deploy and run, in place of Office Standard 2003, the Professional versions of Excel, Word PowerPoint and Outlook and may gain perpetual rights to those programs for free; however, customers who choose this option do not have rights to deploy and run the other component applications in Office Professional 2003 (Access, InfoPath, Publisher and Business Contact Manager), nor will they be eligible for upgrades or to renew Software Assurance on Office Professional upon expiration of their upgrade protection coverage for Office Standard
  • They may choose a promotional path to the full Professional Edition through Microsoft's new Step-Up License, which will give Office Standard Edition customers use rights to the Professional Edition and any updates provided through Software Assurance; the promotion is only effective from Sept. 1, 2003 to Sept. 1, 2004.

"Red the fine print very carefully to make sure that when you get that license you're able to keep going in the direction you want," Joe Wilcox, lead Microsoft analyst at Jupiter Research, told internetnews.com. "If you take advantage of the Office Professional offer, when it's time to upgrade again you either have to pay for the Professional version or go back to Standard."

That may be easier said than done if organizations start making use of the new XML and rights management features that are integral to the Professional Edition. And taking full advantage of the Professional Edition may cost more than the sticker price of Office itself, Wilcox said.

"In some cases, to maximize the benefit, [businesses] might also want to buy additional server software and therefore client access licenses," he said.

He added, "Companies need to closely watch what it's going to cost them to adopt all of those technologies. The need to weight that against the value that they get from those technologies. Just because it costs more up front, that's not necessarily a bad thing. What it really comes down to is what is the value you get out of the software?"

The updated Software Assurance program will also offer other extras, such as "home use rights" that allow employees to install a version of Office 2003 on their home PCs in addition to their PCs at work.

"There, it's a question of whether companies feel that that's something really exciting for them," Wilcox said. "Conceptually, it seems like it would be important, but it's a question as to whether companies see that as a bonus as well."

Whether companies look eagerly upon home-use rights or not, though, Wilcox said that he expects to see more such extras for Software Assurance customers.

"Going forward, look for Microsoft to offer more rewards to companies that signed up for Software Assurance," he said. "My prediction: Microsoft will offer some big discounts or incentives to Software Assurance subscribers with each new product roll out. The Office 2003 home-use rights is a good example. But there is a catch: Businesses would need to move to the next product version to get those extras. While the base Software Assurance contract may cover the basic upgrade, additional CALs and other unseens may lead to additional spending."

Software Assurance is an annuity-based licensing offering, under which subscribers pay Microsoft 29 percent of the total cost of the software per year over the life of the contract, though Wilcox noted the fee schedule can be a bit more complicated when factoring in the license plan itself (Open Value, Open or Select), or when accounting for CALs.






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