Update: Microsoft expands Software Assurance

Microsoft is expanding its Software Assurance (SA) software upgrade plan to appease customers who complain the plan costs too much and offers too little.

Depending on the product, license type and number of licenses bought, SA from Sept. 1 will include support, training, software installation tools, rights to use the software at home, and discounts on other Microsoft products, Microsoft said Tuesday. SA today only offers the right to use the latest version of the software bought.

Microsoft introduced SA in 2001 together with Licensing 6.0, a revamp of its volume licensing program. Analysts and users blasted Licensing 6.0 and SA as nothing but an ordinary price hike.

"We are responding to our customers who were asking for more value in Software Assurance," said Rebecca LaBrunerie, Worldwide Licensing and Pricing product manager at Microsoft. "We learned our lessons with Licensing 6.0."

The additions to SA are the result of talks with more than 2,500 Microsoft customers around the world, LaBrunerie said.

Microsoft is trying to make good after angering some customers with the changes to its licensing terms, said Laura DiDio, a senior analyst at research firm The Yankee Group in Boston.

"Microsoft is making a public mea culpa, a public acknowledgement of the missteps it made two years ago when it announced Licensing 6.0," she said.

However, the changes to SA are designed not only to address customer complaints. Microsoft also hopes more customers will buy into the plan now that it has some added features, LaBrunerie said. "We hope that with these additions even more customers will look at Software Assurance," she said.

Additions to SA were needed to get customers interested and to bring it on par with software maintenance plans offered by other software vendors, said Steve McHale, a Toronto-based vice president of research at IDC.

"Microsoft is trying to accelerate the adoption of software assurance by adding more to it than software updates. Microsoft needed to beef up that package," he said.

SA costs more and delivers less than what other vendors offer, so Microsoft had to expand the plan, agreed Alvin Park, an analyst with Gartner.

"Microsoft's competitors not only charge less for their software maintenance programs, but, until now, included more value. Microsoft's program currently offers only the right to upgrade software to new versions while its competitors also offer access to basic product support," Park wrote in a research note released Tuesday.

What Microsoft is adding to the package is significant, with the most valuable additions being access to TechNet, support, online learning and training vouchers, DiDio of The Yankee Group said. TechNet is Microsoft's online resource for IT managers that includes discussion groups and offers online one-on-one chats with experts.

"The sum total of what they are giving you in this goody bag adds considerable business value. It is worth about $10,000 to a business with between 100 and 200 end-users. To a very large organization this could potentially be worth millions in free stuff," DiDio said.