Software Assurance (SA) customers will get simplified product support rules, improved benefits for desktop software, and free access to new editions of Windows and Virtual PC. The new benefits, announced in Sept. 2005, supplement existing program benefits, such as version upgrades, training vouchers, and employee access to special or low-cost desktop software. The changes also help solve some of Microsoft's problems, such as low deployment rates for new Office versions. However, the changes do not address some major flaws of SA, and some new benefits seem inconsistent with SA's focus on customers who want to use the latest Microsoft technology.

Focus: Support, Desktop

The changes to SA, most of which will be in place by Mar. 2006, mark the most significant modifications to the program since 2003, when Microsoft added a long list of product support and some product entitlements, such as low-cost software for employees' home use. Until then, SA was primarily the vehicle by which volume licensing customers could obtain discounted product upgrades by paying for them in advance.

The new benefits, announced in Sept. 2005, simplify a complex matrix of product support benefits; encourage customers to deploy the latest versions of Windows and Office by offering deployment consulting and services; and offer SA customers access to new versions of Windows and a special version of Virtual PC.

Improved Support Benefits

The most significant changes to SA simplify access to product support. In 2003, SA customers became eligible to submit support incidents to Microsoft via telephone, the Web, or managed newsgroups, but a thicket of rules around these benefits meant that many customers found them difficult to use, which reduced the perceived value of SA. For example, no technical support was offered for Office or the client OS; telephone support was available only to customers who purchased enterprise editions of server software; and customers who purchased SA through the Open License program, used most often by small customers, got less support than customers who purchased through Select or Enterprise Agreements.

Many of these barriers will be removed in the future and all SA customers will find that they have easier access to better benefits.

The most significant changes include the following:

• Around-the-clock phone support covering critical failures for any product eligible for SA, including all server, Office, and Windows products, for customers in any volume licensing program; the number of incidents a customer receives depends on how much the customer has spent on SA
• Unlimited Web-based support for all servers covered with SA
• Relaxation of requirements regarding who at a customer's site can access support, and the need for strict tracking of which licenses are currently covered by SA for support purposes, making it easier for IT personnel to access support for a product as long as at least some of their product licenses are covered by SA
• Customers with separate Premier Support agreements can convert incidents earned through SA into Premier problem resolution incidents, which provide superior service levels and technical account management.

These changes will dramatically increase the utility of SA support benefits, not only by increasing the level of benefits but also by reducing many of the operational barriers. For example, getting support for a downed server under the current program requires that a named contact call during local business hours, that the server be an enterprise edition, and that the caller know details about the SA agreement that covers the downed server—information that in many cases is stored in the corporate purchasing department, not the data center. To adequately protect themselves against problems that don't fit this narrow profile, most large customers also require a large Premier Support agreement that overlaps the benefits for which they are eligible under SA.

The changes not only improve the benefits and their accessibility but provide a stronger foundation for assessing the monetary value of SA, which was difficult when customers could not predict whether the problems they were likely to have would be eligible for support via their SA entitlements. SA and Premier Support are overlapping and sometimes redundant today; with the new program, they will be more complementary. Customers will be able to use their SA benefits to get higher Premier service levels or to reduce their overall support costs by replacing some Premier Support incidents with SA incidents.

Extended Hotfix Support Expanded

As part of the SA overhaul, Microsoft has also tweaked the hotfix benefits it provides for SA-covered software in the Extended Support phase, which typically begins five years after a product version's release date.

Specifically, SA customers who want nonsecurity hotfixes during the Extended Support phase can obtain the required Extended Hotfix Support Agreement (EHSA) without the usual annual contract fee for each product in Extended Support. SA customers will also be allowed to sign up for an EHSA when they request their first hotfix, rather than signing an EHSA in advance as most customers do. Finally, Microsoft has expanded the list of products for which an EHSA is available to include Office and the Windows client OS. Other covered products include Exchange Server, Microsoft Operations Manager (MOM), SQL Server, Systems Management Server (SMS), and Windows Server.

This benefit is immediately relevant for customers with Windows 2000 Server and Windows 2000 workstation, because they moved from Mainstream support to Extended support on July 1, 2005.

This change, implemented in July 2005, will benefit a small group of customers. However, it seems doubtful that large numbers of customers will see SA—a program whose main benefit remains the right to upgrade their software and which costs 25% to 29% of license costs per year—as the best way to support software that they have not upgraded for five years or more and for which they have already purchased an upgrade. Customers with a significant investment in Windows, Exchange, or SQL servers, for example, may find EHSA contracts outside of SA to be less expensive than many years of SA payments on large numbers of licenses. (However, EHSA pricing is not public, so customers should discuss their requirements with Microsoft before making a choice.)

Encouraging Deployment

SA customers will also get a new type of benefit: deployment and consulting.

Enterprise Agreement customers and Select customers can get vouchers for assessment and deployment planning services related to Office and Windows, offered by Microsoft Certified Partners or Microsoft Consulting Services. Although the entitlement is based on their purchase of SA on Office products (ranging from one day of services for US$60,000 in SA to 10 days for US$1.25 million), they can use the services for other Microsoft desktop products, such as planning for future deployments of Windows Vista and the next version of Office (code-named Office 12) or learning about deployment practices that can reduce their total cost of ownership for desktops. Customers can also exchange training vouchers (an existing benefit for customers who purchase SA on Office) for additional services.

Partners interested in providing such services must attend a no-cost training course offered by Microsoft and pass a certification exam.

Microsoft is also planning deployment services for customers using the Open Value program, aimed at small and midsize businesses that do not meet the 250-desktop minimum required for an Enterprise Agreement. They will be eligible for Information Work Solution Services, predefined service offerings delivered by Microsoft Certified Partners. To obtain this benefit, these customers turn in training vouchers.

Customers that have more than 30,000 Office or Windows client licenses covered by an Enterprise Agreement will also be eligible for extra training vouchers. These vouchers can be used for training courses offered by Microsoft Certified Partners for Learning Solutions (CPLS), or they can be traded in to lengthen desktop deployment planning engagements.

New Software Rights

SA customers will also have exclusive rights to several new versions of Windows.

Virtual PC Express is a special version of Virtual PC that will be of interest to customers who have SA on the client OS and anticipate upgrading (such as from Windows XP to Windows Vista). A virtual machine can ease that migration, particularly for organizations with applications that might not run on the new OS, by enabling a user to simultaneously run both new and old OSs on the same computer. Unlike the regular version of Virtual PC, which can support multiple "guest" virtual machines at once, Virtual PC Express will support only one additional virtual machine. However, where the regular edition of Virtual PC requires at least two OS licenses, one for the host OS and one for each virtual machine, Virtual PC Express does not require an additional OS license for the virtual machine.

Windows Vista Enterprise Edition is a planned edition of Windows that includes several exclusive features, including Full Volume Encryption, which enhances the protection of sensitive data on hard disks, and better multilanguage support, enabling global organizations to roll out a single PC image worldwide (rather than having separate images for each language and platform—such as desktops and Tablet PCs—that they use). When used with Virtual PC Express, Windows Vista Enterprise Edition has an Advanced Application Compatibility mode for running legacy software, which will be useful for customers migrating from older desktop OSs.

Windows Fundamentals for Legacy PCs (code-named Eiger). SA customers will also receive a license for this new edition of Windows, which is aimed at older hardware that won't run Windows XP or newer OSs. Eiger can be used for simple tasks, such as Web browsing and media playback, and to connect older clients to current applications running on Windows Terminal Server.

A Step Forward for Customers, Microsoft

The changes address some of the problems with SA and provide incremental benefits for most SA customers while reducing complex restrictions that have marred the SA program in the past. They are also likely to benefit Microsoft itself, notably its Office product line.

Boost for Office

The Office-related benefits address a concern inside the company that not enough customers who have rights to Office 2003 through SA are actually deploying it. (CEO Steve Ballmer told the company's partners in July that, nearly two years after its release, Office 2003 still has only 10% to 15% of the Office installed base.)

While the low deployment rate has not had a significant financial impact on Microsoft (customers with SA on Office have paid for Office 2003, whether they have deployed it or not), it could lead customers to question the value of future SA commitments and of related server purchases. In particular, if they have paid for but not yet deployed Office 2003, they may not see the value of spending yet more money on Office 12, expected in late 2006.

Creating incentives for partners to train on Office installation, deployment, and infrastructure (such as SharePoint and Exchange servers that provide additional utility when used with Office 2003) will encourage partners to promote Office more widely and encourage customers to deploy it and related server products.

Anomalies Remain

Some of the benefits, notably the EHSA benefits and Windows Fundamentals for Legacy PCs, do not seem aimed at the customers most likely to purchase SA—that is, customers who want to upgrade regularly to the most recent Microsoft products. These benefits will probably appeal to a small minority of Microsoft customers: those who purchase rights to the latest versions of Microsoft software yet continue to use outdated versions or old hardware.

Another contradiction that has become even more pronounced with these changes is the fact that SA on desktop software is substantially more expensive (29% of the cost of the full product per year) than SA on server software (25% a year), even though the technical support benefits for server purchases are superior and more costly for Microsoft to provide.

However, Microsoft has steadily improved the SA program over the years, and the magnitude of the current changes suggests that the company may be willing to address these and other flaws in future revisions.

Availability and Additional Resources

The SA program changes will take some time to appear. Most are scheduled for implementation in spring 2006. Others, such as rights to Windows Fundamentals for Legacy PCs and Windows Vista Enterprise, will be subject to the shipping schedules of those products.

However, Microsoft says that benefits that depend on how much customers spend on SA will be applied retroactively to the full term of any SA contracts that are still active when the benefits are launched in Mar. 2006, ensuring that customers currently covered by SA will benefit from the changes even if they are not immediately available.

Details of the new SA benefits can be found at www.microsoft.com/licensing/programs/sa/default.mspx.

Most of the previous benefits offered for SA customers were described in "Software Assurance Improved" on page 24 of the July 2003 Update.

The latest changes to the SA benefits were outlined in a Webcast broadcast on Sept. 15, 2005. A replay of that broadcast can be found at www.microsoft.com/licensing/programs/sa/webcast.mspx.

Windows Fundamentals for Legacy PCs is described in "Windows XP Legacy Hardware Edition" on page 8 of the June 2005 Update.

Recent changes affecting EHSAs are described in "Support Life Cycle Extended for NT, Exchange 5.5" on page 25 of the May 2005 Update.

Virtual PC is described in "First Virtual PC Product Released" on page 11 of the Dec. 2003 Update.