SA Becoming General-Purpose Subscription Service

Software Assurance (SA), introduced as an upgrade rights program in 2001, has evolved into a broader maintenance program, and is now becoming a license to license other Microsoft software and services. Customers who already pay for SA will gain from it, but will need to pay extra to get some of the new benefits. Microsoft’s goal is to build a broader portfolio of products that require SA, which will generate not only revenue from the products themselves but also from the SA prerequisite to use them. In addition, the strategy can help shield the company from competition, integrate new acquisitions into the business, and could be a starting point for expanded subscription services among business customers.

The Three Stages of SA

SA grew out of Microsoft’s experience with Enterprise Agreements (EAs) for volume licensing. EAs offered customers automatic upgrades for Windows, Office, and common Client Access Licenses (CALs) in exchange for a fixed annual fee for each PC in an organization. (CALs are required to access some Microsoft servers, such as Windows and Exchange.)