One Year Later, Customer Feedback Continues To Strengthen Support for Software Assurance

REDMOND, Wash., May 25, 2004 — Microsoft continues to add to its Software Assurance program enhancements, which were announced one year ago and made available in September 2003. The program helps customers better predict their software and technology costs and allows them to cut back the costs associated with education, troubleshooting, maintenance, and support. Software Assurance is now being hailed by some analysts as a leader in licensing and maintenance programs.

Several new program developments were also introduced last year, such as the changes to the Per Processor licensing model, which requires customers to have licenses for the processors that are only used by specific server application products. Also, Microsoft expanded the scope of its intellectual property (IP) protection to cover trade secret and trademark claims for volume licensing customers. This expansion removed the liability cap for covered IP claims, and extended its product warranties from the previous 90 days to one full year, with the audit notice period increased from 15 days to 30 days.

A recent report from IDC predicts that other software vendors will follow suit, adding benefits such as the home-use program and training to their maintenance programs. Microsoft executives say they continually hear how the flexibility of Software Assurance has helped customers achieve their IT goals and stretch their return on investment.

Cori Hartje, Director of Marketing and Readiness for World Wide Licensing and Pricing

Press Pass spoke with Cori Hartje , Microsoft’s Director of Marketing and Readiness for World Wide Licensing and Pricing, to get a better understanding of how Software Assurance has served customers this past year, and how it fits into the present and future goals of Microsoft.

PressPass: How will the World Wide Licensing and Pricing Group help Microsoft customers make better use of their software investments?

Hartje: The Microsoft World Wide Licensing and Pricing Group is tasked with making sure that customers are better able to do business with Microsoft in an easy and clear manner. Our new business models make acquiring software a much more efficient process. For example, our customers no longer have to provide a dedicated room to store a stack of full-packaged product. Today, Microsoft delivers a license, and a set of CDs, which helps provide our customers streamlined deployment and software asset management solutions.

PressPass: Last year, there were several efforts made by Microsoft to simplify and streamline various licensing programs. Why were the changes made?

Hartje: Microsoft places a premium on making sure that we’re delivering software solutions our customers really want and need. We have developed numerous mechanisms and polls to hear directly from customers about what they want from Microsoft, which have played a big role in driving many of these changes. One example is the Licensing Advisory Council (LAC), which is comprised of worldwide customer accounts. The LAC members keep Microsoft apprised of issues they are facing and their attempts to solve them. Other examples of how we receive feedback are customer and partner focus groups, customer and partner conferences and customer feedback by way of their Microsoft Account representatives. The LAC members, and our customer, partner and Microsoft field contacts, are all part of our decision process.

New Software Assurance benefits have been added over the past year for enterprise customers as well as our small and mid-market customers, such as the Open Value program.

PressPass: Can you provide more details about the new benefits that have been added to Software Assurance?

Hartje: Initially, the program was primarily designed to allow customers to spread payments over time and provide product upgrades. Microsoft now provides customers with deployment tools, training and support as part of their licensing agreements. Examples are Web- and phone-based support for our server customers that make it easier to track and fix errors in their operations, and tools for the end user, including a home-use program that allows employees to install copies of software on their machines and take their work home with them.

Software Assurance offers customers a way to get the most benefit and value from their software. We will continue to add value for our customers with Software Assurance.

PressPass: How do Microsoft’s industry partners fit into the approach of implementing licensing programs effectively?

Hartje: Microsoft industry partners play a crucial role in how we conduct business. One key role is in the training centers of our Certified Partners for Learning Solutions (CPLS). These training centers help educate customers on best practices for deploying and using Microsoft products. Through Software Assurance, Microsoft provides training vouchers for customers to take these official Microsoft training courses from the partner of their choice.

PressPass: Can you provide specific examples/scenarios of customers who have Software Assurance and have seen significant value and return on their investment?

Hartje: Industry analyst studies show return on investment is more favorable with Software Assurance. For example, a Dutch engineering firm, Grontmij, was able to train 3,000 workers in four weeks and cut training costs 58 percent. We have similar cost-saving stories from other customers who are using their Software Assurance benefits worldwide.

Our plan is to add more benefits to Software Assurance in the future, such as a new Disaster Recovery benefit for server software that was announced last week. We believe this new benefit will make it easier for customers to have another server ready to come on line in the event of a disaster. Independent researchers agree. IDC has said that they think we are setting a new bar for the industry for maintenance programs benefits. Forrester Research agreed (“Microsoft Licensing: More For The Money,” by Julie Giera, Forrester Research, January 30, 2004), and additionally wrote that Microsoft customers will be pleasantly surprised at the depth and breadth of the recent revisions to the Software Assurance (SA) offering. This will also yield real dollar savings added to the budget as a result.

PressPass: How is Microsoft helping customers decide whether Software Assurance is economically viable for their business?

Hartje: Microsoft asked Forrester Consulting to create a Return on Investment (ROI) tool that can be used to help a customer determine the business and technical value, and calculate the return on investment, break even, cost savings analysis of what they can achieve through use of Microsoft’s Software Assurance benefits. The Software Assurance ROI tool is available now in 13 currencies, and is based on Forrester Research’s Total Economic Impact (TEI) model. Customers should contact their local Microsoft office to explore return on investment with Software Assurance.

PressPass: How do you expect the current schedules for release of Microsoft SQL Server 2005 and other products to affect enthusiasm for Software Assurance and upcoming program renewals?

Hartje: The software upgrade component is only one of part of our volume-licensing programs. There are many customer benefits with Software Assurance, and we view our programs as a long-term relationship between us and the customer. Customers can choose whether they want to participate in Software Assurance, or acquire the license when the product comes out. Software Assurance is designed for customers who want to get the most out of their Microsoft software and have a stronger and deeper relationship with us. Regarding renewals, they are in line with our expectations. We’re tracking at about the same rate we have been historically, and we expect that that will continue.

PressPass: Can we expect more from Microsoft’s Volume Licensing programs?

Hartje: Yes. We will continue to watch industry trends and respond to our customers’ needs by adding value and benefits through our volume licensing programs. One example is a User Client Access license, which acknowledges that users are mobile and using multiple machines, has proven to be very helpful to customers. Also, last week, we announced that we are extending the benefits of Microsoft’s Volume Licensing to our online customers, as Microsoft MapPoint Web Services and Microsoft Office Live Meeting will be available in July through the our programs and channel. Due to the different nature of online services versus traditional software offerings, Microsoft has developed a licensing model and use-rights specific for online services.

Customer involvement and feedback is what drives us, and will continue to drive future volume licensing program developments.

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