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Software Assurance: To Renew or Not To Renew?

Many companies will face a serious decision once their Software Assurance (SA) license comes up for renewal later this year. According to a report recently released by Forrester Research Inc. analyst Julie Giera, 57 percent of the 63 companies interviewed didn't plan to renew or hadn't yet decided on a course of action. Eighty-six percent of the companies (which had PCs ranging from 5,000 to 50,000 desktops) will see their license expire before the end of the year.

Overall, response to SA has been less than enthusiastic (see "SA Exposed," April 2005). According to Giera's report, most companies question the value of a licensing program like SA, which has an annual cost of 29 percent of desktop licenses and 25 percent of server licenses. The program promises regular software releases and updates, special training and content available only through SA.

Giera's report details customer concerns like long upgrade cycles, no roadmap for new products or upgrades, and the overall costs associated with SA. "Microsoft has to get much better at hitting its release dates," says Giera. "Customers still see the majority of value in SA as upgrades."

What choice are you likely to make with your agreement?
What choices are you likely to make with your agreement?
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Base: 61 IT procurement professionals (percentages may not total 100 because of rounding).

Giera offers companies advice on how to get the most bang for their buck if they do choose to renew their SA licenses. Her suggestions include:

  • Hold out for the best deal. Giera suggests insisting on discounts of at least 7 to 15 percent, depending on the size of your organization.
  • Negotiate early. Since discounts require layers of approval, Giera recommends submitting your proposal early in the quarter.
  • Negotiate for extras. Giera suggests outlining your business needs for the next three years to better understand what extras you might want to include in your negotiations.
  • Carefully consider your financials. Although it seems like common sense to do so, Giera urges you to take a hard look at what you're really going to need to ensure that your SA investment makes financial sense.
  • Consider the risks. Before making a final decision, Giera says to think about what changes Microsoft is likely to make and whether these changes are worth the risk of tying your technological and financial future to a licensing program like SA.

SA makes sense for companies that up-grade on a regular schedule, says Giera, so it requires significant forethought. "Deriving value from SA is going to be tied to understanding the logical business plans at your company over the next four to five years," she says. "Is it reasonable to expect that you'll be installing an upgrade every two years? What is the pace of business change?"

About the Author

Lafe Low is the editorial liaison for ECG Events.

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