The main benefit for users is that they can upgrade for free to new versions of Microsoft products covered by the Software Assurance contract.

However, Ollie Ross, director of research at IT directors group The Corporate IT Forum, said, “Unfortunately, many businesses have not benefited here and they are understandably questioning what they have received for the large sums of money involved.�

Microsoft has added enhancements to make the scheme more attractive to users, such as the ability to run back-up servers using free Microsoft licences, access to e-learning courses and use of TechNet technical resources.

But the incentives do not appear to be increasing the scheme’s renewal rate. Last week, Gartner research vice-president Alexa Bona told Computer Weekly that 50% to 60% of Software Assurance users were renewing their contracts, compared with the industry average renewal rate of 90% for enterprise software maintenance contracts.

To attract more renewals, Bona said Microsoft was likely to make certain new products available only to users who buy Software Assurance. “Microsoft is also taking features out of the operating system, such as the language pack for Windows Vista, and making them available only through Software Assurance,� she said.

The language pack, also known as the multi-user interface, provides support in Vista for multinational character sets, which are important for international companies that want to install Windows Vista globally.

“Gartner believes that 30% of Micro-soft customers with more than 1,000 desktops who sign new agreements for Software Assurance on Windows client will do so primarily because they need the multi-user interface,� said Bona.

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