Software Assurance Approaching Critical Deadline

Thousands of Microsoft customers face an important deadline in mid-2004, when Software Assurance (SA) upgrade rights purchased during a major promotion campaign in mid-2002 come up for renewal. In the short term, customers can save money by not renewing their upgrade rights, but they will give up the opportunity for discounted upgrades in the future. Microsoft expects that most of these customers will not renew SA, a decision that will impact Microsoft’s revenues and reduce adoption rates for future products. In an effort to encourage customers to keep their upgrade rights, the company might sweeten the program, or modify it more radically.

The SA Transition Period

The large batch of SA contracts up for renewal in 2004 is an echo of the transition from Microsoft’s previous upgrade programs to the SA offering in 2001 and 2002. The company introduced SA partly to simplify a confusing array of upgrade options for customers in its Open and Select volume licensing programs. (Enterprise Agreements, used by large customers to license Microsoft desktop OSs, applications, and client access licenses [CALs] on all their PCs, already had terms that are very similar to SA.)