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Microsoft denies plans to give 'reparations' for Vista, Office 2007 delays

Software Assurance customers shouldn't look for any rebates

By Eric Lai
August 11, 2006 12:00 PM ET

Computerworld - Microsoft Corp. said reports that it secretly plans to offer "reparations" to corporate customers hurt by delays in the release of Windows Vista and Office 2007 are inaccurate.

EWeek reported Wednesday that Microsoft's OEM group is readying a "customer incentive program" that might offer rebates to enterprise customers that are disappointed over not getting an upgrade to the next version of Microsoft's software -- even though they bought a multiyear Software Assurance (SA) maintenance contract for it.

Sunny Jensen Charlebois, product manager for Microsoft's worldwide licensing and pricing group, said, "There is no reparations strategy. The story took a lot of liberties. There is nothing exceptional being planned for those who signed up for Software Assurance more than three years ago. When you have any new product come out, there are tools and offers to support the adoption of it. It's really business as usual."

Microsoft partners who attended last month's Microsoft Worldwide Partner Conference in Boston and analysts who cover Microsoft licensing issues also said they had not heard of any special program in the works.

"We have not heard of any program that will address the needs of disgruntled SA holders," said Keith Ackerman, marketing director and CIO at New Berlin, Wis.-based SoftwareOne Inc., a Microsoft reseller that specializes in licensing.

"To the best of my knowledge -- and I talk to Microsoft quite regularly -- Microsoft is not doing anything like this," said Al Gillen, an analyst at Framingham, Mass.-based IDC.

SA is a controversial maintenance program that Microsoft introduced in October 2001. Under it, customers -- usually large enterprises that buy hundreds or thousands of copies of software from Microsoft -- typically pay about a third of the cost of their software licenses every year over the life of a three-year contract.

Although SA offers a variety of benefits to users, many buyers fixate on the right to receive a free software upgrade during their three-year subscription, which until recent years was the length of time between releases of most Microsoft software.

But because products such as SQL Server 2005, Office 2007 and Windows Vista were delayed, many subscribers saw their SA contracts expire without getting the upgrade they expected.

In an extreme case, SA subscribers who bought a two-year contract along with Windows XP when it was first released in October 2001 and then re-upped for a three-year contract could see that second contract expire this October without having received any upgrade.

Microsoft currently plans to release Vista to corporate volume customers in November and make it generally available to consumers and small businesses in January, at the same time as Office 2007.

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