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Posted by Christopher Voce on June 30, 2010
With Microsoft's fiscal year end coming to a close today, I wanted to spend some time focusing on future licensing direction. Windows Intune is a significant offering from Microsoft that blends cloud-based management, on-premises tools from the Microsoft Desktop Optimization Pack (MDOP), and Windows – as a subscription service. Let’s put Intune aside for a moment.
Like all software vendors, Microsoft is keen on pulling customers into an annuity relationship for their offerings – a dependable revenue stream that isn’t as vulnerable to things like economic downturns or anything that might delay a purchase. When Microsoft first introduced the Software Assurance (SA) program, it was primarily just upgrade rights – while a license was covered under SA, you had rights to deploy any new versions that came out during that time. Over the years Microsoft has refined the program, adding different benefits to incent customers into the program – but the primary focus of value has remained upgrade rights. Unlike other vendors, Microsoft included security patches and updates as part of a license, so their “software maintenance” program has always been something a little different.
The problem is, in an on-premises software world, several factors can diminish the value of upgrade rights. Customers evaluating whether or not to sign on for SA face some tough questions like: Will an upgrade be delayed due to budget constraints or resources tied up with other initiatives? Will a new version deliver enough new relevant features to justify the upgrade? Will the product be delayed? There are certainly customers who have maintained SA on products like Windows and have not been able to take advantage of the upgrade rights they’ve been paying for. Cloud-based offerings mitigate some of these concerns since upgrades essentially belong to a provider. It’s easy to understand the value of the annuity based relationship with something like cloud-based email hosting where someone is running it for you in their data center and handling upgrades etc. I describe this as predictable value.
Am I saying there isn’t predictable value in SA today? Absolutely not – for some it’s certainly a worthwhile investment if you can take advantage of all the other benefits the SA program provides, and the investment bests a business-as-usual approach of buying licenses as you need them. Others, however, see enough risk that they can’t take enough advantage to make it worthwhile. It’s not a simple equation.
Back to Windows Intune. Windows Intune is a new way of packaging and selling their desktop OS – including Windows SA (which grants rights to the SA-only Windows 7 Enterprise), MDOP (which is a subscription service that requires Windows SA be in place), and the new cloud-based desktop management platform. This new offering represents an annuity relationship centered around an on-premises product in Windows with much more universally tangible, predictable value. We know that it takes internal resources and funds for organizations to manage their PCs. Windows SA and upgrade rights remain part of the investment customers will make – but the primary focus on Intune shifts to include offloading the cost and responsibility for managing PCs that companies face today.
While initially targeted at small and medium enterprises, there’s clearly value for larger organizations in this kind of model. I’ve avoided the term “Desktop-as-a-Service,” but that’s what it sounds like. Windows Intune is still in its beta stage today, with details like pricing and release date yet to come. IT pros should keep an eye not just on the offering, but also on how you think about your future IT budget planning and Windows.
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