Office 14 Delay May Affect Software Assurance Licensees

Gartner analysts warned last week that the delayed release of Microsoft Office 14 means that some customers counting on Software Assurance (SA) to upgrade Office suites may be disappointed.

The "First Take" statement from Gartner comes on the heels of an announcement last week by Microsoft CEO Steve Ballmer that the latest version of Office will not be released this year.

That delay, according to the Garter, could mean that customers and organizations who enacted or renewed SA before December of 2006 may not be assured of receiving the new suite of Office, which was originally scheduled to be an incremental release in the first half of this year.

"Organizations need to quantify the value of the benefits they receive from SA in order to determine if they should renew their [SA] agreements," said Michael Silver, Gartner analyst and coauthor of the First Take in a telephone interview. "Each renewal varies from contract-to-contract, and, in some contract periods, customers may receive upgrades in addition to the other services and benefits. The biggest danger today is for customers who renew just after Office 14 ships."

Silver, and coauthor Frances O'Brien, state in their First Take that there are few benefits "beyond new version rights" in Software Assurance. Microsoft does not guarantee new-version availability in an SA contract, according to the report. Office 2007 was released on November 2006 and customers with contracts in place were entitled to that version.

Microsoft stands behind its SA program, calling it a "comprehensive offering that helps customers deploy, manage and migrate software throughout its lifecycle," according marketing materials.

"Customers who renew their Volume Licensing Agreement with SA today have already received the benefits of Office 2007 and will continue to reap the benefits of their agreement, including deployment services, training vouchers, home use rights, eLearning and Office 14," stated a Microsoft spokesperson by e-mail. "Only a specific subset of customers will be impacted by the timing of Office 14. As Gartner notes, Microsoft will work on a case-by-case basis with customers who will not get new version rights to Office 14 during their contract period."

Microsoft would not disclose the percentage of Office users that opt for SA. In a self-selected survey conducted by Gartner at a fall conference, more than 77 percent of respondents had SA. The price per seat for SA, according to Gartner, is estimated at $250 to $400, which equates roughly to the cost of a new version of Office.

"At the end of the day, it all comes down to your view of renewals," Silver said. "With renewals coming every 36 months, organizations have to determine the value of training vouchers, packaged services, and of course, if Microsoft will release a new version of software during the contract period."

About the Author

Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media.

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