It’s Now Harder Than Ever to Not Renew Software Assurance on Microsoft Windows Enterprise Agreements
If you have a Microsoft Enterprise Agreement (EA) and are considering not renewing Software Assurance (SA) on your Microsoft Windows Desktop Operating System (OS) licenses, you may need to carefully review the Product Use Rights (PUR) or the more recently released Product Terms. Early last year Microsoft changed some of the language within the PUR that makes SA a requirement to reassign a Microsoft Windows Enterprise license from one PC to another.
Many of our clients struggle with the value of Software Assurance (SA) on Microsoft Windows Enterprise. Over the years, Microsoft has worked hard to ensure that clients understand that the OS bought via Volume Licensing programs such as the Enterprise Agreement is an upgrade license to the OEM. It appears in reviewing the Product Use Rights that there have been changes to the license reassignment rights of Microsoft Windows Enterprise, which now requires SA.
Why Not Take Advantage of Software Assurance?
The challenge for most clients is that they do not typically upgrade the OS when Microsoft launches it. Many organizations ran Microsoft Windows XP for years, skipping Windows Vista and deploying Microsoft Windows 7 only when Windows XP was no longer supported by Microsoft. A quick review of some of the deployment data that we have reviewed over the last few months, shows a similar trend. The sample of 10,000 PCs had less then 5% Microsoft Windows 8 deployed. In conversation with our customers, most are saying they will wait for Windows 10, but are in no hurry to move off of Windows 7. They need time to recoup the investment they made to deploy Windows 7 and are not in a hurry to go through another round of expensive application compatibility testing.
With the launch of Windows Vista the Enterprise Edition was introduce. The Enterprise Edition is not available through OEM and up to a couple of years ago was only available with the purchase of SA. Over the years many technical differences have been made between Windows Pro (available through OEM) and Windows Enterprise. The most notable used to be BitLocker, although more recent editions of Windows Pro include this.
Other differences such as the Virtual Desktop Infrastructure (VDI) are a product use right to allow access to Virtual Machines loaded on servers utilizing popular VDI Technologies such as VMWares’ View or Citrix XenDesktop. Similarly, Microsoft has a subscription product that can be added to active SA called the Microsoft Desktop Optimization Pack (MDOP). If a customer with SA expiring was determining if they wanted to renew, they would review there use of the subscription/product use rights and review their upgrade paths to determine if renewing SA was justified.
Now to the license re-assignment issue. If you review the January 2014 PUR (available on the Microsoft website), under the Universal Terms Section you will find the following on License Reassignment:
Most, but not all, licenses may be reassigned from one device or user to another. The general rules governing license reassignment are described below, along with some special rules for certain products and license types.
Limitations on License Reassignment
Except as permitted below, you may not reassign licenses on a short-term basis (within 90 days of the last assignment), nor may you reassign licenses for Windows desktop operating system or Rental Rights, or Software Assurance separately from the underlying license to which the Software Assurance is attached.
Condition on License Reassignment
When you reassign a license from one device or user to another, you must remove the software or block access from the former device or from the former user’s device.
So far so good, we can reassign a Windows Enterprise License from one device to another as long as we follow the Microsoft 90 day rule. If we scroll through this section a little further, we find that there is a special section for the Reassignment of SA for Windows OS in the January 2014 PUR:
Reassignment of Software Assurance for Windows and Windows Industry operating systems. You may reassign Software Assurance coverage and the underlying Windows Enterprise Upgrade license or Windows Industry Enterprise Upgrade license to a replacement device, but not on a short-term basis, and only if that replacement device is licensed for a qualifying operating system as required in the Product List; provided, however, you must remove any related desktop operating system upgrades from the former device. Reassignment of a Windows Enterprise Upgrade license or Windows Industry Enterprise Upgrade license may only be done if the upgrade license is covered by active Software Assurance.
That last sentence changes the ability to not renew SA. Here’s why:
I review my use of the OS and determine that you do not require the subscription licenses or MDOP and think, great you do not need to renew SA. Our review has determined however that we do require Windows Enterprise features (that we retain perpetual rights to). This is where the new reassignment rule gets you! When you refresh a PC (most of our clients refresh between 25% and 33% of their fleet per year) you obtain a Windows Pro OEM license but now you cannot reassign my entitlement for Windows Enterprise to that PC without active SA. So you either need to purchase a Windows Enterprise Upgrade license or maintain SA.
For comparison’s sake here is the same section in the January 2014 PUR with the older, less restrictive language:
Reassignment of Software Assurance for Windows and Windows Embedded operating systems.
You may reassign Software Assurance coverage for Windows and Windows Embedded operating systems to a replacement device, but not on a short-term basis, and only if that replacement device is licensed for a qualifying operating system as required in the Product List; provided, however, you must remove any related desktop operating system upgrades from the former device.
The question that we are now being asked, is does this apply to me? The answer unfortunately is most likely but it depends. The language in Microsoft contracts like Select Plus and the Enterprise Agreement have provisions for utilizing previous Product Use Rights (i.e. the January 2014 PUR), but whether your organization can leverage is going to depend on a review of that language. If you have questions on this, please feel free to contact us at email@example.com and we would be happy to talk to you about how you can determine if this is an issue for you.