REDMOND, Wash., Dec. 10, 2003 — Many companies and organizations are looking to acquire Microsoft software and upgrades that will provide the greatest return on investment in the coming year. Leading technology-industry analysts say they should consider tailoring licensing purchases — including Microsofts Software Assurance.
“Every company has different needs, different strengths and weaknesses,” Julie Giera, vice president and research fellow at Forrester Research, said recently. “So we recommend that you take a look at the set of benefits that are available. Pick and choose not just based on economic value but (based on) what aligns with your business needs.”
Giera was among four top industry analysts participating in a webcast Microsoft hosted on Nov. 12 to discuss feedback theyve received on Microsoft Volume Licensing and Software Assurance. The analysts provided practical guidance to help companies and organizations make effective technology investment decisions for 2004. Also participating in the webcast was senior analyst Laura DiDio with the Yankee Group, research director Alvin Park with Gartner, and research director Al Gillen with IDC.
The analysts agreed that Microsofts efforts to revamp its licensing program in 2001 left many customers confused. Subsequently, in September of this year, after talking with more than 2,500 customers, the company rolled out key enhancements to Software Assurance. As a result, the analysts urged companies to take another look at the offering.
“Software Assurance is really transitioning from a maintenance product with some added value to a full cycle of products and services,” Gillen said. “What Im seeing is that it appears as if Microsoft, moving ahead, is going to continue to offer new value through Software Assurance, including management tools and deployment tools that are going to be really useful for managing your environment.”
Some of the new features now offered with Software Assurance include the employee Home Use Program for Microsoft Office System software, access to a wide variety of e-Learning resources, technical support, vouchers for employees to attend training courses and Microsoft TechNet access. Microsoft offers benefits which vary by licensing program, by product and by region with the goal of increasing the customers return on investment.
DiDio said the Yankee Group polled more than 5,000 organizations before and after they upgraded to Licensing 6.0 and Software Assurance to find out what it actually cost them, compared to what they had expected. In the first poll, 90 percent of customers said they expected both a price increase and that Software Assurance would cost their business. About half said they expected an increase of between 30 and 50 percent.
“After we polled them subsequent to the recent enhancements to Software Assurance and them negotiating new deals, only 20 percent had seen price increases, and none of the customers had seen costs tripling, doubling, these huge spikes that they had anticipated,” DiDio said. “In fact, most customers said that they were able to hold the line on prices or even see price decreases.”
Some customers that acquired Software Assurance found that the business value resulted in an approximately 28-percent decrease in prices, “because they might have gone out and bought training (and) the Home Use Program separately before this,” DiDio said. “There has been very immediate return on investment and a reduction in total cost of ownership.”
Park advised that Software Assurance may not be right for every business. “Customers must do the homework to find out which elements of the package suit their needs,” Park said.
“You can put a price tag on e-Learning, you can put a price tag on the Home Use Program, you can put a price tag on TechNet,” he said, referring to the packages of technical-support resources available to companies participating in Software Assurance. “You can then look to see how much that is worth to your organization, and (use that information to) help you make a decision on whether Software Assurance is for you.”
Gillen addressed the special licensing needs of small businesses, many of which do not have an in-house IT staff and therefore often use a mixture of systems from a variety of hardware vendors frequently acquired through various channels. This makes managing the IT environment more challenging. In addition, its often difficult for smaller businesses to make an upfront payment for software that they will use over a period of time.
Gillen discussed the special needs of small businesses, and the options offered to them through Microsofts Open Value program
“Its a way for these customers to potentially line up their software over a multiyear purchase arrangement,” Gillen said. “By expanding the depth and breadth of the contract that they would go into with Open Value, they can actually lower their overall costs for all the software products they use.”
Giera said many Microsoft resellers, or channel partners, view the benefits offered with Software Assurance as a plus.
“Many of the Microsoft channel partners that weve talked with have realized that these new Software Assurance benefits are a platform on which they can add their services on top,” Giera said. “To extend, if you will, to be able to help customers with managing of their licenses, help them with education and training, help them with support.”
As part of Microsofts efforts to listen to customers, the company has recently introduced additional benefits to its volume licensing program:
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Under the new Step-Up promotion, customers with Software Assurance attached to any standard edition of Microsoft server software have the flexibility to upgrade to the enterprise editions by paying the price differential. Microsoft Office 2003 and Microsoft Project 2003 also have this Step-Up option.
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Customers who acquire their Microsoft Office licensing through an original equipment manufacturer (OEM) partner and have it installed on their machine can acquire Software Assurance on top of those machines, enabling them to take advantage of the available benefits.
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In January 2004, Microsoft will start to roll out Solution Accelerators for Office a set of templates and tools for such areas as finance, human resources and sales. These will be available to customers that have Software Assurance on the required Microsoft Office software that is needed to run the desired Solution Accelerator.
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Also in January 2004, Microsoft will begin including a Microsoft Press Discount Program for Software Assurance customers. This program enables customers employees to get significant discounts off retail pricing on Microsoft Press titles.
The analysts recommended that customers evaluate their long-term software purchasing requirements, and begin planning for what their needs are in terms of spreading payments and using the additional Software Assurance enhancements. Further, the analyst panel suggested that customers examine what value those benefits will bring to the overall return on their software investment.
More information about Microsoft Volume Licensing options and the benefits of Software Assurance is available at the Microsoft Licensing site .
