Microsoft Denies Software Assurance Exodus

Software Assurance, Microsoft's enterprise subscription plan which allows subscribers to upgrade to new product releases at a 29% discount per year per desktop and 25% discount per server, provides Microsoft a steady revenue stream in years absent from major Windows or Office releases. Under normal conditions, clients benefit from recieving discounted releases regularly every few years. Unfortunately, conditions have been anything but regular with Vista's much delayed launch. Due to the five year waiting period for Microsoft's new OS, Software Assurance customers will end up paying 145% of the retail cost of Windows, an amount far from the expected discount. A Forrester survey earlier this month indicated confidence levels were at record lows, with as few as 11% of Software Assurance subscribers planning to definitely renew their plans.

Not so fast, says Joe Matz, Microsoft's corporate vice president of Worldwide Licensing and Pricing, in a statement released on the company website. According to Matz, renewal rates are at record highs, exceeding "the high end of our historic range of 66-75 per cent." Paul DeGroot, lead analyst for the firm Directions on Microsoft, explains this incongruity between researcher expectations and real world figures: "The lesson here is that customers don't have a lot of good choices. Getting out of Enterprise Agreements involves a fair amount of work and planning. It's not something that you just stop doing. If you don't plan, there's a good chance that your company is out of compliance with its licensing." Additionally, the Software Assurance plan is often forcibly bundled with Microsoft's enterprise agreements, and, faced with either regular audits to ensure license compliance or the agreements, companies tend to favor the latter option, as it tends to be cheaper than regular licenses, even with the bundled Software Assurance subscription.

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View: Software Assurance Q&A on Microsoft.com

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8 Comments

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So what he means by "Getting out of Enterprise Agreements involves a fair amount of work and planning." is that the only reason enterprises aren't leaving because Microsoft has locked them in, right?

billyea said,
So what he means by "Getting out of Enterprise Agreements involves a fair amount of work and planning." is that the only reason enterprises aren't leaving because Microsoft has locked them in, right?


Pretty much
When someone's got you by the balls, it's kinda hard to walk away

z0phi3l said,


Pretty much
When someone's got you by the balls, it's kinda hard to walk away

Not just legal but technological - idiotic businesses basing their intenally written applications on non-portable languages which yield no benefits over using something like Python/Qt or Java - or make it accessible through a browser.

billyea said,
So what he means by "Getting out of Enterprise Agreements involves a fair amount of work and planning." is that the only reason enterprises aren't leaving because Microsoft has locked them in, right?

Not only that, but he actually threatens that companies will have mysterious licensing problems if they decide to leave Software Assurance... Sounds like the mafia to me!

Though I can understand how the subscribers are not happy, they cannot forget that that's what they signed up for. It's like that with any subscription service: most of the time you'll be getting a good deal, but there are times when the value is outweighed by other circumstances. That's just the way it goes. Besides, I'm sure everything that they've saved on previous versions of software is more than the excess caused by the slump.

gigapixels said,
Though I can understand how the subscribers are not happy, they cannot forget that that's what they signed up for. It's like that with any subscription service: most of the time you'll be getting a good deal, but there are times when the value is outweighed by other circumstances. That's just the way it goes. Besides, I'm sure everything that they've saved on previous versions of software is more than the excess caused by the slump.

The only ones who really benefited from the subscription are those who used Microsoft products from top to bottom in every aspect of their business - hence the reason i said several years ago when they bought it it - its a way of getting more of their software into businesses.