By Stephen Covert – Highlights for Children
ITAK v6 I3
Some organizations have not maintained Software Assurance (for the purposes of this article, maintained the right to upgrade their OS) on their Windows desktop OSs over the last economic downturn. The organizations who delayed upgrading their PC inventory are now considering upgrading their PCs or Desktop OSs. By understanding Microsoft’s history of promotions leading up to the release of the next desktop OS, “Windows 8” (not the official name), an organization can possibly reduce cost and risk if they plan their purchases based on Microsoft’s past promotions.
Though Windows 8 is not due for release for more than year, Microsoft has initiated their cycle of promotions to entice organizations to upgrade to Windows 7 and, for a fee, ensure they will have rights to Windows 8. This promotional cycle may be of interest to any organization that does not have upgrade rights to the next Windows OS release. Additionally, any of these organizations that are also considering a PC refresh should be aware of the potential opportunities (and pitfalls) that may await them. Though there is no guarantee that Microsoft will introduce the following promotions as they have before, it would be wise to at least consider the promotions Microsoft has provided in the past while planning a Windows OS upgrades or PC inventory refresh. The following information is a review of the past promotions that were provided in conjunction with Volume License Agreements and a related purchase of Software Assurance leading up to the release of Windows 7:
Past Promotions and Options (please refer to Exhibit A – the upper timeline);
(Window 7 promotion #1) – Windows Software Assurance Attach Offer – February 1, 2008 – June 30, 2008
This promotion provided Open Value and Select Volume License customers (who purchased Windows Business or Professional Licenses with new PC’s through OEMs after December 31st, 2006 and before June 30, 2008) which had not purchased Software Assurance while they were qualified to do so the ability to acquire Software Assurance coverage for those PCs.
(Window 7 promotion #2) – Windows Software Assurance Attach Offer – February 1, 2009 – August 31, 2009
Original promotion February 1, 2009 – June 30, 2009 but was later extended to August 31, 2009.
This promotion provided Open Value and Open License customers (who purchased Windows Business or Professional Licenses with new PCs through OEMs after July 31, 2008 and before September 1, 2009) the ability to acquire Software Assurance coverage for those licenses.
Windows 7 Upgrade Option – June 26, 2009 – January 31, 2010
This offering provided anyone who bought a PC (with Windows Vista Home Premium, Business or Ultimate from a participating OEM or retailer) the option to upgrade to the corresponding version of Windows 7 at little or no cost.
Present and Potential Promotion and Options – (please refer to Exhibit A – the lower timeline)
The following section is a review of Microsoft promotions both in the present and the future based on past promotions that have occurred. Past promotions have been offered to entice customers to acquire Software Assurance through a Volume License Agreement and thus gain rights to the next OS release. (Any promotion provided through the Volume License Agreements may be found in the Promotion Section of the Product List released monthly and retained on the Microsoft Volume License website.)
In February of 2008 Microsoft introduced a promotion that was intended to provide organizations that had not acquired upgrade rights to the next desktop OS, Windows 7, the opportunity to purchase upgrade protection. Once again, Microsoft has introduced a similar opportunity for organizations to purchase an upgrade path to Windows 8 in the form of the following promotion.
The Windows 7 Upgrade promotion is intended to incent customers to upgrade their desktop PCs currently running the Windows XP or Windows Vista OS to Windows 7. This promotion runs from January 1, 2011 to June 30, 2011, and offers up to a 20% discount for a Windows 7 upgrade when Software Assurance is purchased with an enrollment under Open, Open Value, Select and Select Plus and Worldwide Government Partner programs (exclude charity) agreements. Though this program does not require the purchase of a PC, each qualifying PC must be licensed for either Windows XP Professional OS or Windows Vista Business OS in order to take advantage of this promotion. If organizations are not planning to purchase new PC hardware in the foreseeable future, this may be a promotion worth considering. This provides the ability to upgrade the present PC operating systems to Windows 7 and provides the opportunity to upgrade to Windows 8 assuming that Windows 8 is released while the purchased Software Assurance coverage is still active.
Given that any interest in Software Assurance is only to gain access to the Windows 7 upgrade and the future Windows 8 upgrade, the Open License Agreement may be worth considering. The Open License agreement has a two year term rather than the three year term required of all the other Volume License Agreements. Thus, a company can reduce the number of years of purchased Software Assurance by an entire year. Though Open License Agreements may not carry the same level of discounting as the other Volume License Agreements, paying for two years of Software Assurance rather than three years should provide for a lower overall cost. The risk still exists that if Windows 8 is not released during the term of the acquired Volume License Agreement, then one may need to either extend the existing agreement (not an option under the Open License) or initiate another agreement.
Before acting on this promotion, several considerations must be made surrounding the existing hardware as to whether it will run the new OS in an acceptable manner. Given that the existing hardware potentially is old enough to be running and licensed for Windows XP, there is a very good chance that it may not run Windows 7 effectively. Therefore it would be prudent to compare the present PC inventory to the Windows 7 minimum requirements. An additional risk to consider is that the present hardware will not support the future release of Windows 8 (for example, if Windows 8 requires a 64 bit PC). If this occurs, one may need to purchase new PCs that would have Windows 8 loaded on it. In effect one would be purchasing Windows 8 twice, once by purchasing the upgrade rights though this promotion and again when one purchases the new PCs.
In February of 2009 Microsoft introduced a promotion that provided organizations that had purchased PCs after July 31, 2008 but had not acquired upgrade rights (Software Assurance) to the next desktop OS, Windows 7, the opportunity to purchase those upgrade rights. This promotion was introduced the month after the beta for Windows 7 was released and extended to end two months before the release of Windows 7. This gave customers a 13 month window to reconsider and purchase Software Assurance for PCs that had been purchased during that timeframe. Typically, a customer only has 90 days after the purchase of a license (PC in this case) to add Software Assurance if it is not purchased originally.
Though there is no guarantee that Microsoft will extend a similar promotion as it did before the release of Windows 7, the resulting benefits to Microsoft (additional income from Software Assurance and their customer’s commitment to use Microsoft’s desktop OS in the future – the lynch pin of their software offerings) enhances the likelihood that a similar promotion will occur in the future. Additionally, a greatly scaled back version of this type of promotion occurred before the release of Vista, which would indicate that the promotion had (and will have) the type of reaction from customers that Microsoft desires.
If an organization is considering the purchase of PCs during the timeframe that leads up to the release of Windows 8, it would be worth evaluating the effect that a promotion of this nature may have on the decision. With this promotion there are two distinct timeframes where the considerations change. Those are before and after the beta release of Windows 8. When one purchases PCs before the beta release (assuming Software Assurance is not automatically purchased), one should focus on trying to provide oneself with the option to purchase Software Assurance if desired. Any purchase of a PC without Software Assurance before the release of the beta will carry with it the risk that Microsoft will not provide the same type of promotion (a longer grace period) to purchase Software Assurance. In order to deal with this risk, organizations could delay a purchase of PCs to be as close to the expected beta release date as possible. Since beta release dates are not made public, purchasing a PC before the beta release carries with it some risk. If the release of the beta occurs within the 90 days of the purchase of the PCs one will have the balance of the 90 to determine whether the enhancement to Windows 8 justifies the purchase of Software Assurance. If during the 90 day period after the PC purchase Microsoft provides the promotion similar to the Windows 7 – Promotion #2, one then has the full grace period of the promotion to evaluate whether Windows 8 justifies the additional expenditure for Software Assurance.
The risk is reduced during the second timeframe (after the Windows 8 beta is released) because the organization purchasing the PC without Software Assurance has at the very least 90 days to evaluate whether Windows 8 justifies the expense of purchasing Software Assurance. If a promotion similar to Windows 7 – Promotion #2 is provided, then once again, an evaluation of Windows 8 can be done until the end or the promotion before making a Software Assurance Purchase decision.
Potential Upgrade Option?
The final “option” (Windows 7 Upgrade Option) which started before the Windows 7 – Promotion #2 ended was a way to keep customers purchasing PC previous to the release of Windows 7. This option was created as a result of a Microsoft compromise with PC manufactures to maintain the demand for PCs while customers were waiting for the release of Windows 7. Once again, there is no guarantee that this option will become available, but the need to maintain customer’s demand immediately before the release of Windows 8 will exist and this option was also provided before the release of Vista which may indicate that the option worked well in the past and may increases the likelihood that this option will be available in the future. If this option does occur and an organization has deferred its PC purchase until this time, it can eliminate the need to purchase Software Assurance if its only objective for Software Assurance is to obtain the next Windows OS.
Many organizations that have not maintained Software Assurance on their Windows desktop OSs over the last economic downturn and have delayed upgrading their PC inventory are now considering upgrading their PCs. By understanding Microsoft’s promotions and history of promotions leading up to the release of the next desktop OS they can possibly reduce cost and risk if they plan their purchases and timing of their purchases based on Microsoft’s past promotion offerings related to the next Window desktop OS release. Though there is no guarantee that Microsoft will provide similar promotions, many dynamics that have existed in the past still exist, and increase the likelihood that Microsoft will provide promotions leading to the future release of Windows 8.