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Microsoft has insisted is Software Assurance (SA) maintenance program is ontrack despite reports its planning incentives for businesses hurt by delays to Windows Vista and Office 2007 and Gartner advising users to bluff Microsoft when renewing their contracts.

Sunny Charlebois, Microsoft senior product manager, said Wednesday Microsoft is planning incentives to drive uptake of Windows Vista and Office 2007 but claimed these are typical of the types of offer made by Microsoft when it introduces a new product.

"Windows Vista and Office are new products and we will have tons of incentives to drive adoption of the new products. Promotions are often part of incentive programs," Charlebois told The Register.

She was speaking following a report Microsoft is devising incentives targeting customers on its volume pricing programs that have failed to receive the upgrades to Windows and Office expected when they signed their agreements. The incentives are expected to rollout in the fall of 2006, ahead of Windows Vista and Office 2007.

Charlebois continued that 75 per cent of customers on its Enterprise Agreement (EA) volume licensing program are renewing SA - SA comes with EA. Separately, Gartner estimates 50 per cent of customers have SA on Office and the Windows client and between 65 per cent and 70 per cent have SA on Microsoft's sever products - a rate lower than similar programs offered by Microsoft's enterprise competitors.

Microsoft has a painful recent history in software licensing and maintenance agreements. SA's introduction incurred a huge backlash among customers alarmed by the fact their software costs were increasing while receiving little in return. Microsoft has since sought to sweeten the SA pill by adding all kinds of extras, such as training and home-use rights.

Microsoft last month gave customers on SA the right to run four copes of Windows on their virtual machine, to take advantage of server virtualization.

While Microsoft is playing up EA renewals, it's not breaking out what percentage are using EA versus its other volume licensing programs - Select and Open. And therein lies the rub, as Gartner is now advising customers to use Select and Open as gambits for reducing what they pay Microsoft in licensing fees.

Gartner has advised customers they can tell Microsoft that they can forego EA and manage licenses through Open or Select, using a license re-purchase strategy every four years. SA last two- to three-years and is designed to have a lower upfront price.

Such a tactic is not for the faint hearted, though. "If Microsoft knows that you have no intention of dropping your EA, or that your internal management and compliance processes are not robust enough to enable you to walk away, then significant leverage will be lost. Dropping EA coverage must be a credible alternative," Gartner said.

Charlebois is putting a brave corporate face on Gartner. "That's why we offer Select [and Open] as an option. Customers have the flexibility to choose... The main thing is making sure customers get value from the products and maintenance and services they purchase," she said.

She added no customers have so-far taken Gartner's advice. Apparently.®

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