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Microsoft adds more to licensing, Software Assurance pot

May 19, 20042 mins
Enterprise ApplicationsMicrosoft

Microsoft Wednesday made another move to improve the value of its controversial volume-licensing program with two updates that add disaster recovery features and hosted services to corporate contracts.

On June 1, Microsoft will add a benefit to its Software Assurance (SA) program that provides the right for corporate customers to install an additional copy of any licensed server software on a “cold” server that is dedicated to disaster recovery.

According to Microsoft, a cold server is defined as a server that is turned off until a disaster arises. Customers would not be allowed to do any processing or production on the server, except for specified maintenance. Microsoft said the benefit is only applicable for the term of any given two- or three-year SA contract and is non-perpetual.

Also on June 1, Microsoft will add to its volume licensing price list MapPoint Web Services, an XML-based Web service that allows developers to integrate location-based services into applications, and Microsoft Office Live Meeting, an online Web conferencing service.

The additions to the licensing program are part of Microsoft’s efforts to add value for corporate customers to Licensing 6.0, its volume licensing model and in particular SA, a software maintenance program.

Last September, Microsoft added training, support and software tools and home-use rights for Office to the SA menu.

And last week, the company released a five-year roadmap for its server products that included bi-yearly updates to Windows Server that played into the annuity-licensing model of Licensing 6.0 and SA.

But SA has been less than well received since its introduction in 2001 when many users determined the program would increase their software costs and rejected it.

A recent survey by Jupiter Research shows that three quarters of small and midsize businesses don’t use a Microsoft licensing plan. The report also showed that only about 16% of enterprise customers subscribe to SA or the program it replaced, Upgrade Advantage. Microsoft officials say uptake of SA is on par with expectations.

Over the next two months, however, Microsoft will see hundreds of thousands of maintenance contracts come up for renewal, which could hold billions of dollars in revenue. Microsoft has said if it gets less than a 10% renewal rate, it may indicate customers don’t value SA.

The company has been trying to convince customers that SA holds value beyond access to new versions of software.