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Gartner: MS subscription licence may become ‘mandatory’

Cliff Saran

Microsoft is likely to make changes to the way its products are licensed that could, in effect, make its Software Assurance subscription licensing programme mandatory by 2009, analyst firm Gartner has predicted.

Through the software company’s subscription plan, users pay an annual fee of 29% of the licence cost of their desktop software, or 25% of the server licence fee licence, over a three-year term.

The main benefit for users is that they can upgrade for free to new versions of Microsoft products covered by the Software Assurance contract.
 
However, Ollie Ross, director of research at IT directors group The Corporate IT Forum, said, “Unfortunately, many businesses have not benefited here and they are understandably questioning what they have received for the large sums of money involved.”

Microsoft has added enhancements to make the scheme more attractive to users, such as the ability to run back-up servers using free Microsoft licences, access to e-learning courses and use of TechNet technical resources.

But the incentives do not appear to be increasing the scheme’s renewal rate. Last week, Gartner research vice-president Alexa Bona told Computer Weekly that 50% to 60% of Software Assurance users were renewing their contracts, compared with the industry average renewal rate of 90% for enterprise software maintenance contracts.

To attract more renewals, Bona said Microsoft was likely to make certain new products available only to users who buy Software Assurance. “Microsoft is also taking features out of the operating system, such as the language pack for Windows Vista, and making them available only through Software Assurance,” she said.

The language pack, also known as the multi-user interface, provides support in Vista for multinational character sets, which are important for international companies that want to install Windows Vista globally.

“Gartner believes that 25% to 30% of Microsoft customers with more than 1,000 desktops who sign new agreements on Windows client will not be renewing.” However she said some businesses were now being upgrading their Software Assurance because they needed the multi-user interface, said Bona.

Gartner also predicted that Micro-soft was likely to make Software Assurance a prerequisite for Premier Support, a 24x7 technical support contract popular with businesses running critical IT infrastructure on Microsoft technology.

Bona said the supplier could even restrict Service Pack releases, which have been used in the past by Microsoft to distribute patches and new functions, as in the 2003 release of Windows XP SP2.

Microsoft was unable to say whether it would continue to make new software or support available exclusively to businesses running Software Assurance.

A spokesman said, “Software Assurance helps customers get the most value from their IT investment.”

He said the programme provided users with access to the latest technology and productivity benefits. The Microsoft Desktop Optimization Pack, which helps users build a Windows IT infrastructure that can deliver applications as services, is only available through Software -Assurance, for example.

Software Assurance value questioned >>

Software Assurance deals in doubt >>

Microsoft offers two license options >>

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