Software Assurance, Microsoft's enterprise subscription plan which allows subscribers to upgrade to new product releases at a 29% discount per year per desktop and 25% discount per server, provides Microsoft a steady revenue stream in years absent from major Windows or Office releases. Under normal conditions, clients benefit from recieving discounted releases regularly every few years. Unfortunately, conditions have been anything but regular with Vista's much delayed launch. Due to the five year waiting period for Microsoft's new OS, Software Assurance customers will end up paying 145% of the retail cost of Windows, an amount far from the expected discount. A Forrester survey earlier this month indicated confidence levels were at record lows, with as few as 11% of Software Assurance subscribers planning to definitely renew their plans.
Not so fast, says Joe Matz, Microsoft's corporate vice president of Worldwide Licensing and Pricing, in a statement released on the company website. According to Matz, renewal rates are at record highs, exceeding "the high end of our historic range of 66-75 per cent." Paul DeGroot, lead analyst for the firm Directions on Microsoft, explains this incongruity between researcher expectations and real world figures: "The lesson here is that customers don't have a lot of good choices. Getting out of Enterprise Agreements involves a fair amount of work and planning. It's not something that you just stop doing. If you don't plan, there's a good chance that your company is out of compliance with its licensing." Additionally, the Software Assurance plan is often forcibly bundled with Microsoft's enterprise agreements, and, faced with either regular audits to ensure license compliance or the agreements, companies tend to favor the latter option, as it tends to be cheaper than regular licenses, even with the bundled Software Assurance subscription.
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