Software Assurance Faces Critical Year

Microsoft’s annuity licensing plans face a major test in 2005, when many licensing agreements are up for renewal. Customers are taking longer to make renewal decisions, and changes to Microsoft product roadmaps have altered the value and timing of future updates, making it more difficult for customers to determine the value of paying for them on an annuity basis. With future releases uncertain, other benefits of volume licensing (of which annuity licensing is just one part) will assume greater importance. Customers need to consider all the options, including full renewal, renewal for one year, or nonrenewal.

Annuity Licensing Plans

Microsoft’s main annuity payment offering, Software Assurance (SA), covers software updates for volume licensing customers.

It is automatically included (and mandatory) for licenses purchased through Enterprise Agreements (EAs), for customers with more than 250 PCs, and through the Open Value volume licensing program, for customers with fewer than 250 PCs. These programs focus primarily on desktop software, although servers can be added to them, and customers use them to pay for licenses and SA over three years.