One in four companies that bought into Microsoft’s
Software Assurance licensing programme in 2004 are being
deterred from renewing the three-year deal because they perceive it
to be poor value, a study by Forrester Research has
revealed.
Users running Software Assurance, which was introduced in July
2001, are facing their second round of renewals. But more than 25%
of IT managers polled said they would not be renewing their
Software Assurance subscription, and 18% said they would renew the
licensing only for some Microsoft products.
One company facing tough decisions regarding its Software
Assurance strategy is global property firm Knight Frank. Head of IT
Owen Williams said the company bought Software Assurance on some
Microsoft products, but he said renewals would be considered
carefully.
“I fundamentally do not like the Software Assurance approach. It
removes choice in the way companies manage product upgrades and
increases the cost of running a Microsoft infrastructure,” he
said.
The main benefit of Software Assurance was always the upgrade
guarantee, said Ollie Ross, director of research at IT directors
group The Corporate IT Forum.
“Unfortunately, many users have not benefited here, and they are
understandably questioning what they have received for the large
sums of money involved,” she said.
Nick Leake, director of operations and infrastructure at
broadcaster ITV, said the company’s policy was not to buy Software
Assurance.
He said the annual charge needed to be reduced to reflect how
businesses were deploying Microsoft software. “Increasingly,
organisations do not upgrade every three years. They would rather
upgrade every five years or more. I predict many organisations
would upgrade even less frequently if they did not feel forced into
unwanted upgrades.”
Alexa Bona, research vice-president at analyst firm Gartner,
estimated that Microsoft’s renewals on Software Assurance were only
50% to 60%, compared with 90% for maintenance contracts from other
enterprise software companies.
Bona said she expected Microsoft to add some new features to
increase its renewal rate, such as providing applications and
service packs that would be available only through Software
Assurance.
She urged users to speak to Microsoft now to tie down their
existing and new licence terms and conditions.
Microsoft said the main benefit of Software Assurance was
predictable budgeting for software and support, with access to
24-hour phone support and unlimited web-based support.
Microsoft software assurance deals in doubt
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