Microsoft Users Lack Assurance

IT execs plan to renew SA pacts -- but grudgingly

Microsoft Corp. last week unveiled a group of new and upgraded offerings for companies subscribing to its controversial Software Assurance maintenance plan. But even with the additions, SA continues to get very mixed reviews from IT executives.

Some Microsoft customers said the new perks sweeten the SA pot. But others are still less than thrilled about putting their money down on the maintenance program.

"I think we're getting value for SA. [But] we're certainly getting complexity," said Zeke Duge, CIO at Smart & Final Inc., a Commerce, Calif.-based grocer. "If you don't mind equating the two, it's OK."

"There's a lot of clutter," echoed Tony Mason, IT operations manager at Retirement Systems of Alabama in Montgomery. Mason hailed SA benefits such as free training vouchers for his staff. But with "Microsoft trying to throw something out for everyone, it's hard to weed through what might work for you," he said.

The five-year-old program initially focused on providing guaranteed software upgrades to companies willing to pay 29% of their license fees annually on desktop products and 25% on server products. But as Microsoft began to miss deadlines for releasing upgrades to software such as SQL Server, Office and Windows, it began to add other benefits to SA.

That pace has quickened in the past year. Last November, the vendor rolled out its Microsoft Product Licensing Advisor (MPLA), which it touted as an online service to help customers weigh their buying options. In March, Microsoft added another 18 benefits to SA, including exclusive access to the enterprise version of the upcoming Windows Vista, home-use rights for licensed software, and round-the-clock telephone and Web support.

In this round, Microsoft is promoting benefits such as access to Windows Fundamentals for Legacy PCs, a stripped-down operating system aimed at users who want to bring the security features of Windows XP SP 2 to their older Pentium PCs.

"It seems like Microsoft's strategy is to pile on benefits until people say, 'OK, we give up,' " said an IT manager at a California-based technology services provider who requested anonymity. "I mean, what's next -- a fruit-of-the-month club?"

The user, who has no plans to discontinue his SA agreement, said he doubts Microsoft will be able to get back on track and release major software upgrades every three years. Thus, the IT manager said, he would prefer that the company either boost Software Assurance with something he could really use -- such as full-fledged technical support -- or let customers buy a less-pricey version without "all the bells and whistles."

Paul DeGroot, an analyst at Kirkland, Wash.-based Directions on Microsoft, said that

a number of corporations whose SA contracts are expiring this year told him that they plan to buy a one-year extension to their plans -- which Microsoft allows customers to do once -- to get access to Windows Vista and Office 2007. After that, said DeGroot, those users plan to take a hard look at whether they should renew SA for another three years.

Others plan to renew their SA contracts for another full term, despite their complaints.

Mason said Retirement Systems of Alabama's second SA agreement expires this month. The pension plan administrator intends to sign up for a third round, he added.

"We don't just buy SA for the upgrades," Mason said. "Our accountants like it because our billing is more levelized. We don't have to worry about keeping track of our licenses or any huge, unexpected expenses."

Duge said SA has only added to the work of his IT staff.

"For the amount of resources I need to commit to do a 'proper job,' I need to see a demonstrable return to justify the additional workload," he said. Duge also thinks he is paying Microsoft more than he did before he signed up for SA. But he still plans to renew his contract when it expires because SA's budgeting convenience outweighs its negatives. "It's painful," he said. "I don't like it. But I'm gonna pay it."

At A Glance
Sprucing Up SA

The latest benefits added to Software Assurance:

• Ability to install up to four copies of Windows Vista Enterprise per PC using now-free Virtual PC 2004 SP1

• Access to Windows Fundamentals for Legacy PCs, a stripped-down version of Windows XP SP2

• Relaunched Forrester Software Assurance ROI tool

• Revamped Microsoft Product Licensing Advisor, including live assistance from Microsoft representatives

Copyright © 2006 IDG Communications, Inc.

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