Microsoft's Latest Channel Assurance

The new software maintenance program offers free planning, deployment, usage, support and transition services to enterprise and SMB customers that fork out additional dollars for Software Assurance beyond the cost of the software licenses. Customers who sign Enterprise Agreements (EAs), in contrast, automatically get Software Assurance rights and are entitled to the new benefits.

The core benefit of Software Assurance is the right to upgrade to new software versions released during the term of the contract with Microsoft and to spread payments over a three-year period. This replaced the former Upgrade Advantage discount program offered prior to 2001.

Software Assurance adds other important benefits, including technical support, training vouchers, home-use rights and hot-fix support. In 2006, those benefits have been expanded to include new desktop deployment and office solution services, as well as 24x7 technical support with a fixed number of incidents and unlimited Web support, Microsoft said.

It also includes a new and controversial requirement that customers must buy Software Assurance in order to receive Windows Vista Enterprise, which is expected to be the most popular business version of the Windows upgrade when it ships later this year.

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One partner said the requirement would irritate customers that don’t have EAs or don’t subscribe to Software Assurance, but it is a good way for Microsoft to improve the image and value of Software Assurance and compel customers to shift to annuity-based contracts. “If Microsoft is truly forcing Software Assurance to get the Vista Enterprise Edition, either the value in including Enterprise or the value of Software Assurance has to be worthwhile,” said Ken Winell, CTO of Visalign, a VAR in King of Prussia, Pa. “Most of our clients have Enterprise Agreements in place and will get this.”

Research firm Gartner estimated that 50 percent of Microsoft’s business customers buy Software Assurance. That’s a small percentage compared to other large software vendors, said Alvin Park, an analyst at Gartner.

“A lot of people don’t buy Software Assurance, and Microsoft is trying to increase the uptake of their maintenance. Other vendors have 90 percent-plus uptake of their maintenance offering. That’s not true for Software Assurance.”

Some smaller resellers are upset that Microsoft is encouraging customers to go to EA. But others note that customers also can buy Software Assurance with Select Agreement, which will be delivered through the channel.

While resellers weigh the impact of Software Assurance 2006, many are anticipating the new Desktop Deployment Planning Services for the enterprise and Information Worker Solution Services for SMBs will have a positive benefit for Microsoft’s service partners.

The Desktop Deployment Planning Services are available to Select Software Assurance Membership (SAM) and Enterprise Agreement customers. The Information Work Solution Services are available to Open Value customers who sign Software Assurance agreements.

Partners also must enter into a packaged service provider agreement and sign a Desktop Deployment Planning Service Addendum, according to the same documents.

One Microsoft partner is optimistic the desktop deployment and information workers services will drive services revenue for the channel.

“The partner-driven consulting services will have a huge impact on the market. Through these services we will be able to drive customer adoption and ensure that the software they have doesn’t sit on the shelf,” said Matt Scherocman, director of Cincinnati-based PCMS IT Advisor Group.