In-Depth

Expert Offers Tips on Microsoft's Software Assurance Program

• By Kurt Mackie
• 03/01/2013

Deciding on Microsoft's Software Assurance (SA) option isn't getting any easier, to hear an independent licensing expert tell it.

Rob Horwitz, research chair at Directions on Microsoft, presented the basics, plus some tips, in a Webinar last week on how to evaluate Microsoft's annuity licensing option. The SA option is like an annual extended warrantee that's sold on top of Microsoft's licensing, he explained. Even when buying PCs from original equipment manufacturers, SA is offered separately. It's is available as an option on OEM PCs for just 90 days.

Microsoft's volume licensing plans for its software are offered as either "perpetual" or "subscription" models. Certain types of licenses must be purchased across an organization, Horwitz added. Lately, Microsoft has been advancing its subscription (or "rental") model of software licensing, especially with its recent Office 365 rollout. Those Office 365 subscriptions have some attributes that are similar to licensing plus SA.

"Office 365 is sold as subscriptions and includes Software Assurance, sort of," Horwitz said. "It includes the benefits of SA but it isn't marketed as such."

He added that the Office ProPlus productivity suite offered through Office 365 is "almost exactly identical" to some perpetual-license Office suites. However, with Office 365, the SA upgrade benefits "are baked in."

Software Assurance Benefits
SA provides three benefits. First, it gives organizations the rights to use Microsoft's newer emerging software -- if an organization is still covered by SA for that product at that time. However, that's a "gamble" for organizations, according to Horwitz, because Microsoft doesn't guarantee new software will ship in that period. The second benefit of SA is special use rights, such as virtualization rights, a category that is growing, Horwitz said. Lastly, Microsoft throws in other perks that Horwitz didn't describe, except to say that they add "low value compared with overall spend."

For those privileges, Microsoft charges organizations 25 percent to 29 percent of the underlying software license price to get that SA coverage. That can be a potentially hefty price for budget-constrained IT organizations. Moreover, calculating the options can get a bit complex.

Beating the System?
The options for organizations coming to grips with SA begin to narrow when they have IT departments that replace their Microsoft software every four years.

"It's going to be a wash if you have a four-year replacement cycle," Horwitz said. "You have to roll out [software] frequently to justify the SA option," he added.

If the software product version is good enough for the next few years, then it makes financial sense to depart from SA coverage for a while, he said. But Horwitz cautioned those thinking about cancelling SA coverage to "be aware of product dependency." An upgrade of another product, such as Windows, SharePoint or SQL Server, could cause "a domino effect."

For instance, organizations with Windows Enterprise Agreements can let their SA coverage lapse and they can continue to use Windows. However, Horwitz said that there can be "a lot of caveats on ability to install [Windows] on new machines if you need to change hardware."

He also cautioned about virtual desktop infrastructure (VDI) use rights. He said that those rights expire when SA coverage expires.

"If you let SA expire, you don't have the ability to run VDI but can continue to run Windows on desktops," Horwitz said. Alternatively, it's possible to purchase a Virtual Desktop Access (VDA) license for desktop virtualization but "it's more expensive than a Windows SA license," Horwitz explained.

Mandatory Software Assurance
Sometimes buying SA coverage isn't an option at all, as in the case of Client Access Licenses (CALs). CALs give end users the rights to access Microsoft's servers. Organizations must buy SA with CALs initially, according to Horwitz. The tip he added is that organizations don't have to renew their SA payments after the initial purchase. They can still use the software, even if they didn't subsequently renew their SA agreements.

For those organizations buying Enterprise Agreements under Microsoft's volume licensing, Microsoft makes the organization buy SA for everything, Horwitz said. Organizations don't have to buy SA when getting licenses through Open, Select or Select Plus programs. Consequently, some organizations buy Enterprise Agreement licensing just for some things but use Select licensing to avoid purchasing SA in other cases.

"If you have a thousand users, and only 300 need VDI, then you just buy SA for the 300 users," Horwitz explained.

SA is also required for certain Windows use rights. It's required for using VDI, local virtualization (such as running Hyper-V on a Windows 8 client), Windows To Go (Microsoft's portable Windows 8 running on memory sticks), the use of the Windows Enterprise edition and the ability to use various tools in the Microsoft Desktop Optimization Pack.

SA is also required when using Office roaming rights. It's required for using SQL Server Enterprise to host an unlimited number of virtual machines (otherwise, an organization is limited to running VMs on the number of licensed cores). Those wanting to move their server installations as needed, instead of once every 90 days, typically need SA. The one exception is Windows Server, which can't be moved except once every 90 days -- even with SA coverage, Horwitz said.

Horwitz had a lot more to say about the topic and fielded questions. His talk, "Evaluating Software Assurance," is available on demand at no cost at this telebriefings page. The Kirkland, Wash.-based independent consultancy also offers publications, expert advice and live seminars on licensing.