Microsoft has made a special effort to increase the value of Software Assurance (SA) beyond new version rights and to encourage the adoption of SA for Windows Client. Here, we present a framework to analyze and quantify the benefits to enable organizations to decide whether it's worth the annual fee.

• Most organizations will need to find value from at least three SA benefits to justify SA financially. Most benefits will be valuable to only a subset of users in an organization.
• The Multilingual User Interface (MUI) is a benefit that's available in volume only through SA. It has different value based on how it's used.
• Organizations with users that require additional Windows licenses (for example, for PC virtualization) will always find SA cost-effective for those users.
• Organizations that require any of the Windows Vista Enterprise (WVE) features or want to use Microsoft's Desktop Optimization Pack (MDOP) or Vista Enterprise Centralized Desktop (VECD) will need to license those PCs with SA.

• Most organizations should move to new versions of Windows only as new PCs are purchased — this reduces the value of SA, because new version rights aren't used.
• Quantify the value of each feature and the percentage of users that will take advantage of it. Multiply the value by the percentage to calculate the average benefit per user.
• Consider buying Windows Client SA for a subset of users, if that's more appropriate than buying it for everyone. However, understand that this may require more administration and better asset management capabilities for tracking.

Microsoft sales representatives struggle to persuade customers to buy SA, Microsoft's software maintenance program, for the Windows Client (the desktop operating system), because new PCs arrive preloaded with the current version of Windows Client. SA is important to Microsoft, and the company is striving to increase its attach rate. SA gives Microsoft a large, predictable revenue base, and Microsoft believes that enterprises that sign up for SA will remain loyal customers. Customers that already own licenses for new versions of products based on an SA agreement are more likely to deploy them and, in turn, perceive value from them and renew their SA agreements.

With the release of Windows Vista products, for example, Microsoft incorporated features into the client operating system that are exclusively available to clients covered by SA. Microsoft also introduced two subscription services that require SA on the Windows Client as a prerequisite for subscription. Microsoft sought to improve the uptake of SA by including exclusive content. Depending on a user's volume license program and price level, SA generally costs from $95 to $162 per PC over a three-year agreement, or about $32 to $54 annually. The ability to spread out payments is one of the basic benefits of SA.

Organizations should examine each benefit and assign a value per user, based on the number of users that will take advantage of the benefit. To justify the purchase, organizations should determine the value of the benefits, then compare that value with the cost of SA.

SA conveys rights to new versions of the covered product. In the case of the client operating system, the value of this benefit has been questioned by many customers, because they still must purchase new PCs with licensed copies of Windows and can only use new version rights for PCs purchased with an older release of Windows installed. Although some organizations have negotiated with Microsoft for the right to upgrade from Home Stock-Keeping Units (SKUs) so that they can buy fewer expensive PCs, many need to buy PCs that are licensed for the more-expensive Business SKUs from their OEMs (see Note 1).

For organizations that plan to move to new client operating systems through hardware attrition, this benefit has no value. Organizations that plan to upgrade all of their PCs to Windows Vista at once or to skip Vista and upgrade all their PCs to Windows 7 in about 2012, which is the year Windows XP is likely to become difficult to support and Windows 7 will reach maturity (see "Understand the Risks of Skipping Windows Vista"), will need licenses for some, but not all users. This is because the most recently purchased PCs will already be licensed for their target operating systems. Upgrade rights can also be obtained by purchasing a Windows Professional Upgrade (WPU), which costs approximately $150 per user.

To estimate a per-user value for this benefit, multiply your cost for a WPU (based on your Select level minus any other discounts available from your reseller) by the percentage of users you are likely to upgrade from a prior version. For example:

• Move to new operating system by PC hardware attrition: value = $0/user
• Plan a fork-lift upgrade to Vista in 2009, but bought new PCs preloaded with Vista for 25% of users in each of 2007, 2008 and 2009: value = $150 x 0.25 (representing the 25% of PCs that were bought in 2006 without Vista licenses and will be upgraded) = $37.50 per user
• Skip Windows Vista and plan a fork-lift upgrade from Windows XP to Windows 7 in 2012. There are two possible scenarios:
  • Less-Likely Scenario — Windows 7 includes downgrade rights to Windows XP and Vista: PCs bought in 2010, 2011 and 2012 will have Windows 7 licenses: as in the prior scenario, value = $37.50 per user
  • More-Likely Scenario — Windows 7 includes downgrade rights to Windows Vista only: PCs bought before 2012 will have not Windows 7 licenses (they will be purchased with Windows Vista preloaded so that XP can be run using downgrade rights): value = $150 x 0.75 (representing the 75% of PCs, which were bought in 2009, 2010 and 2011 without Windows 7 licenses that will be upgraded) = $112.50 per user

This is a special Vista SKU available only to users with SA. WVE has features unique to that version, although some are included in WVU, a consumer SKU. It may be installed and run on a PC that was covered by SA even after SA expires; however, it cannot be moved to a replacement PC if SA is not in effect.

Vista inherently supports multiple languages to be used and users may switch between them, but only WVE and WVU include the extra language packs that enables these features to be used. This allows all languages that Vista is available in to be included in a single image and enables the user to switch languages. Previously, OEMs sold Windows XP MUI for a $10 to $15 premium/PC over the English version.

Most organizations use MUI to enable them to create a single system image for worldwide use. The ability to switch languages and let a single PC run in different languages for different workers (for example, for shift workers that speak different languages) is arguably a more valuable benefit, but it's required by fewer users. The controversy about MUI concerns the fact that organizations now have to buy SA to get MUI with its language-switching feature, even if users only want to select a single language and erase the rest. Ironically, this is how many OEMs ship PCs to regions where multiple languages are spoken (for example, PCs shipped to Canada usually offer English and French preloaded), but enterprises don't have the right to replicate this function in their custom images.

Some clients will consider the cost per user they paid their OEMs when they assign a value to this benefit. Another method is to estimate the cost of going back to a multiple image situation. Based on Gartner research, the annual cost for image maintenance and creation in our model was $13,000 per image per year. To estimate the benefits per user, we suggest multiplying annual cost of creating and maintaining one image by the total number of images needed minus one, and dividing by the total number of users.

For organizations that deploy most of their PCs in a single language, consider the possibility of building two images: one in the primary language, the other with MUI for all other users (see Table 1). This would require the purchase of SA only for the number of users who don't use the primary language. Multiply the annual cost of creating and maintaining one image by the total number of images needed minus two, and divide by the total number of users that don't use the primary language.

Benefits for users who need to switch languages could be significantly higher, perhaps also allowing more flexibility of resource use or reduced PC purchasing. For these users, this benefit alone would be high enough to justify SA.

BitLocker could be used for two purposes. First, by relying on hardware support — Trusted Platform Module (TPM) 1.2 chip or Universal Serial Bus (USB) key — it enables protection of the PC and hard drive in the case of loss or theft. Secondly, it can secure data during PC disposal by destroying the key. However, this doesn't adhere to the overwrite process described by the Department of Defense (DOD) 5520.22M standard, which is often corporate policy. Ensure that auditors or security personnel deem this method acceptable before you use it. (For more details, see "Best Practices for Data Destruction.")

Companies should quantify the value of BitLocker for each purpose they use. For disk encryption, based on the cost of third-party independent software vendor (ISV) offerings (see "Magic Quadrant for Mobile Data Protection, 2007"), we assign a value of $35 per PC in our examples. For disposal, a three-pass overwrite data sanitization performed by a service provider would cost about $20 per PC and would meet the DOD 5520.22M standard. Assuming other vendors that sell encryption software could eventually make the disposal claim, a company that would buy a single solution for security and disposal purposes should assign only the value of that product to BitLocker.

PCs that will use dual-boot or PC virtualization software (such as VMWare Workstation or Microsoft Virtual PC) will need additional Windows licenses. There's no way to buy full Windows licenses on any volume license agreement (only upgrades are available), so without SA, full retail versions at $200 to $300 must be purchased. The SA benefit includes the ability to run up to four additional copies of Windows on each PC. For the small number of users that typically need PC virtualization (such as developers, technical sales and help desk), SA is automatically justified.

The next-generation of Microsoft's Portable Operating System Interface (also known as Posix) subsystem that formerly shipped with Windows Services for Unix 3.5, SUA enables some Unix applications to be run on Windows. It eases the integration between Windows and Unix/Linux by creating a Unix environment directly on top of the Windows kernel. We estimate its value to be from $86 to $110 per seat for the small percentage of users that will need it.

This is a diskless PC that runs Windows, but does not store Windows or data locally because it doesn't have a hard drive. Diskless PCs are enabled by removing the hard disk from a PC, forcing a remote boot over the network and allowing streaming software (for example, Ardence, now owned by Citrix) to remotely deliver the Windows operating system to the PC. SA allows a diskless PC, which has shipped with a Windows license/Certificate of Authenticity (COA), to boot from a server. Some believe this amounts to double paying, because the diskless PC is required to be licensed for Windows anyway, but the benefit amounts to an additional use right. This benefit is nonperpetual, and a diskless PC cannot be used if SA lapses. For these machines, SA is required and the cost should be included in the cost-benefit analysis of the diskless server project.

Available only with SA, this is a trimmed version of Windows XP (not yet Vista) for use on older PCs that are not powerful enough to run Windows XP. The main purpose of WinFLP is to enable users running old PCs to be able to replace unsupported versions of Windows with a supported release of Windows XP. Microsoft will support a limited number of applications running locally; others will need to be run from terminal servers.

WinFLP may be a benefit if it helps you delay replacing older PCs, but, by definition, any PC running WinFLP does not derive value from WVE or new version rights. The WinFLP licensing is nonperpetual; once SA expires, WinFLP must be removed from any PC running it. An old PC, not covered by SA, would also need a Windows Upgrade (approximately $150) to be eligible to sign up for SA. The value may be compared with the cost of replacing the old PC with a Windows Terminal, which may not need SA. The cost of the terminal services infrastructure — servers, Client Access Licenses (CALs) and so on — should be compared with the cost of purchasing a new PC.

VECD for SA Subscription must be purchased in addition to SA to enable a user device that's licensed for Windows (has a Windows COA) to access a VM running on Windows on a host, usually from a server in a data center. VECD gives organizations an easy way to license VMs, while it shifts the licensing requirement from the hosted machine to the client accessing it. Each client may access up to four host sessions with a single VECD license. This license is nonperpetual, and host VM use must cease if a client VECD for SA or SA expires on the client. The cost of VECD for SA is as much as $23 per user per year for rich-client devices (devices with a COA). The price is as much as $120 for thin clients, including SA.

We suggest calculating the benefit as the number of VMs multiplied by the cost of a full Windows license ($200 to $300) minus the number of PCs that will access the VMs multiplied by the cost per VECD license. For example, if you have 100 VMs and 500 PCs accessing them, you don't need to license Windows for any of the VMs, saving $250 (average) x 100 = $25,000, but you would need to pay $20 (average) per PC, in addition to SA, costing $20 x 500 = $10,000, yielding a benefit of $15,000/500 PCs = $30.

Open Value users that subscribe to SA for Windows will receive a one training-day voucher for every 50 licenses they keep under SA, with a maximum of five days (value $500 per day; total $500 to $2,500). Select customers will get anywhere from one day per 25 Windows clients under SA (250 licenses) to one day per 857 licenses they have under SA (for an organization with 600,000 licenses under SA) based on a sliding scale.

For every $200,000 spent on SA for Windows Client (or Microsoft Office), the customer will get one free support call (approximate value $750 to $1,000). The calls must be used during the SA period. They can be converted to Premier Support calls; however, then they might expire sooner, because Premier Support Agreements generally run for one year, while SA runs for three years.

When an operating system enters the extended phase of support (usually five years after release), extended support enables the customer to pay for nonsecurity fixes. The support contract fee of $50,000 is waived for SA customers, as is the requirement to subscribe within 90 days of the product entering the phase. However, all fixes will be charged; paying the fee entitles the organization to one fix, which costs about $30,000, so the value is about $20,000 for Year 1. Both annual and per-fix fees increase each year. Windows 2000 is currently in the extended phase, but few customers have the need for nonsecurity fixes. Consider this a benefit if you think you would take advantage of it.

This additional set of product benefits is offered exclusively to SA subscribers at additional cost. (For more information on MDOP benefit quantification, see "Quantifying the Value of Microsoft's Desktop Optimization Pack.")