Redmond Negotiator

A New Vista on SA for Windows

Is Software Assurance on the desktop really for you (or anyone)?

Recent client discussions reminded me that deciding whether to buy Software Assurance (SA) is still a complex and intimidating decision for many companies. So let's take a look at one of the more complicated topics: Windows desktop.

Probably the most common point of confusion is the meaning and impact of OEM licensing for Windows.

To start, there are only two ways to buy a new, full copy of Windows:

  • When you buy a new PC from an original equipment manufacturer (OEM).
  • When you buy a full license via retail (aka "shrink wrap").

That's it, folks! Microsoft does not offer volume license customers any other means to buy a PC with a "blank" hard drive and install a full, legal copy of Windows. Instead, most of us will buy our PCs preloaded with some version of Windows from the OEM.

So when you buy Software Assurance for Windows Desktop (and Microsoft products in general), you're not buying "full license rights," but rather "upgrade rights" along with all of the other SA benefits (more on those later).

One more thing about OEM Windows (and Microsoft OEM software in general): The original license is non-transferable, meaning the license for Windows that came with a particular PC must stay with that PC forever; you may not re-allocate it to other PCs. However, the Software Assurance coverage is transferable, with some reasonable restrictions.

Now, since the only realistic way to get Windows desktop licenses is with a new PC, and you can't keep the license when you retire the PC, and the OEMs are usually going to ship the latest version of Windows, it begs the question: Why do you need Software Assurance, anyway? Why not just wait for your usual three- or five-year PC replacement to update your operating systems? After all, you're going to have to physically touch all of those machines eventually (at significant time and expense for large shops).

I think that's been a significant challenge for Microsoft -- especially as the Longhorn/Vista releases drag out and customers complain about SA dollars that never resulted in an upgrade. I also think that's a key reason for some of the recent announced "enhancements" to Software Assurance. Let's take a look at those.

Microsoft recently announced changes to Software Assurance to be effective in March 2006. Among these are Windows Preinstallation Environment and Windows Vista Enterprise. Although these are being sold as "benefits of SA" I actually view them as a reactive, restrictive move by Microsoft to protect their Windows SA revenue. Here's why: In past versions of Windows, there was no "up charge" for enterprise-type deployment tools. And in past versions of other products such as Windows Server, Microsoft offered "upgrade-only" licenses to the Advanced or Enterprise versions.

The net effect is customers who have to renew their license agreements before March 2006 are forced to make a judgment call -- based largely on Microsoft’s promises about new products that haven’t shipped yet.

So what should you do?

First, spend some time on Microsoft’s Web site and discussion forums to find out as much as you can about what functionality that is and isn’t slated to be included in Vista, Windows PE and Vista Enterprise. Decide if your shop even needs the promised functionality at all.

Next, look at your existing tools: deployment tools, imaging tools, desktop management tools. Do you already own the functionality you need? Why buy it again? Ask your non-Microsoft tool vendors about their plans to support Vista.

Finally, talk to your Microsoft and reseller reps to find out exactly how much Windows SA will cost you. Let them try to prove their business case and understand your options.

Whatever you do, don’t be bullied or snowballed into buying SA for Windows unless you know exactly why you need it and you have factored in the appropriate "software vendor exaggeration ratio."

Final note: There are a lot more details to Windows OEM licensing that I don’t have room to cover here, but I've written a complete quick-reference guide. If you’d be interested in purchasing a copy, send an e-mail to OEM@Microsoft-Secrets.com (and feel free to send along any questions you have on this topic as well).

About the Author

Scott Braden has helped more than 600 companies negotiate Microsoft volume license deals. For a free case study, "How a Mid-size Company Saved over $870,000 on a $3 million Microsoft Enterprise Agreement, in Less Than Three Weeks," visit www.MicrosoftCaseStudy.com.

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