Software Assurance Cost vs. Importance


This position paper focused on the issue of Software Assurance cost against its importance. It offered relevant argument to support Software Assurance cost. Software products bear risks and threats that could have massive impacts on end users. Software Assurance programs offer vendors opportunities to assure their clients on safety, reliability and security of their products. Software Assurance costs are however high and end users may end up paying more for the product during the contract period for new release or updates that would never come to be. In addition, high costs could be prohibitive for small ad hoc buyers while much higher for large organizations with several users. Nevertheless, given the benefits that come with Software Assurance, it is imperative for organizations to consider them and understand returns on investments, including nonmonetary values. Vendor must provide products that meet end users’ expectations while Software Assurance terms should be simple to understand. At the same time, end user education is necessary to aid in understanding the basis of Software Assurance and related costs.

Description of the Issue

Software companies such as Microsoft have introduced programs known as Software Assurance to provide customers with savings. Critics, however, have argued that such assurance programs cost clients even more in the end. In most cases, higher costs could be obvious while in some instances costs are hidden in complex mathematics concealed under license fees and other charges (DeGroot par. 1). While organizations can completely reduce initial costs of software investments by eliminating Software Assurance costs, in this position paper, however, it is argued that firms can conduct a thorough return on investment analysis for Software Assurance costs to determine the significant cost savings, increase their understanding and usages of the Software Assurance opportunities.

According to Woody, Shoemaker and Mead software assurance is the “level of confidence that software is free from vulnerabilities, either intentionally designed into the software or accidentally inserted at any time during its life cycle, and that the software functions in the intended manner” (3). Companies have created Software Assurance programs to allow end users to get all product grades and updates released within the license agreement period. The period for the agreement could be up to three years. According to SCO Group, Inc., the annual cost of Software Assurance could range from 25 percent to 29 percent of the total cost for the server and desktop respectively. It is imperative to note that the Soft Assurance is only offered to clients when the product is purchased and licensed. If the product is however not covered under the Software Assurance, then cost of “obtaining a new release or upgrading the package is 100 percent of the product cost” (SCO Group, Inc 4). That is, existing end users who fail to purchase Software Assurance do not get any financial benefits from vendors in case of a new release. A company such as Microsoft removed the idea of ‘upgrade’ except under the Software Assurance program (SCO Group, Inc 4).

Software Engineering Institute acknowledges that it is not simple to assure the security, safety, reliability or other nonfunctional components of software-driven platforms because of their rapidly changing nature, complexity and size (par. 1). The situation has occurred because the traditional approaches such as conventional software tests and evaluations have failed to guarantee and offer confidence to end users on software reliability, functionality, security and safety. As a result, enterprises offer Software Assurance at costs. Software Assurance is perhaps the only viable option to offer confidence to end users about products. Technically, software vendors rely of assurance to structure their arguments that a product will work as expected and therefore consumers should have confidence in it. Software Assurance, however, comes at costs to end users.

DeGroot is a fierce critic of Microsoft’s Software Assurance policies, particularly annual charges. He argues that many end users end up paying for assurance, which they might never benefit from because vendors may fail to release new products or the end user may not upgrade the product within the contract period. This implies that the customers may pay software vendors annual subscription fees for no value at all.

Amidst this confusion occasioned by complexity of Software Assurance calculations, what consumers requires is education on Soft Assurance to create awareness, risks, benefits and security. At the same time, software vendors should also review their unfair terms to promote proactive and predictive use of Software Assurance opportunities.

Arguments for the Software Assurance

Software Assurance assists organizations to enhance return on their software investments by promoting “best practices in software management as well as providing a range of services and technologies that help organizations to be more productive and efficient” (Konary and Perry 1). As a result, customers under the Software Assurance programs have been able to lower their costs, predict costs and enhance capabilities of employees.

Organizations should consider Software Assurance because of its inherent benefits. Today, there are many remarkable technology dynamics, which present challenges to IT departments. Generally, firms deploy software programs to drive their productivity and improve their competitive advantage. In addition, many businesses are not in the business of IT and therefore rely on external vendors for IT products and support. Many software products exist and the truth is that “managing many diverse components of software infrastructure is a major challenge” (Konary and Perry 6). Organizations have also focused on cost-reducing strategies, but they still want employees to be much productive. Software Assurance programs help organizations to address these technicalities. For instance, Software Assurance programs, based on vendors’ terms, could offer a wide range of advantages, including management, support, end user training, as well as access to new releases and updates. These benefits assist organizations in increasing their outputs, enhancing management and improving the realization of return on investments.

Software Assurance assists in software management. Software management involves the use of single standard software across the entire organization, which reduces time IT administrators use for administration, maintenance, installation, patching and updates. Moreover, it eliminates many challenges associated with compatibility and application outputs. At the same time, a standardized platform also reduces costs of IT support and management of applications such as server (Konary and Perry 6).

Software Assurance is also associated with deployment benefits. Deployment of new software consumes IT staff time. Software Assurance may have Deployment Planning Services (the case of Microsoft), which are mainly utilized to plan and manage new deployment programs within a company. The service helps organizations to reduce their costs, for instance, Home Use Program provides trial rights to for new products and helps to reduce support calls for new software deployment (Konary and Perry 6).

Some of the vendors also offer Software Assurance training opportunities. This strategy reduces costs associated with end user training. Organizations may adopt e-learning and technical training programs to reduce their costs of training staff on usages of new releases. Microsoft’s Home Use Program also contains training options to allow end users to learn programs at their convenience.

Software Assurance programs may also have support services offered by vendors to end users. Support benefits are opportunities for end users to save costs. Microsoft’s Software Assurance provides access to support services for clients in different regions. Today, many vendors offer support services throughout the year to their customers. The Premier Support Contract allows users to extend support advantages to others with different platforms in different regions.

Software Assurance also offers TechNet Benefits (Konary and Perry 6). Through this platform, IT support gains access to newsgroups, evaluates license and analyzes technical issues highlighted. Most importantly, customers may gain direct access to solutions without waiting because it is accompanied by reserve numbers, which IT staff may call to enhance support services. In addition, organizations find it easier to support their internal clients particularly those with similar software programs through Software Assurance.

Software Assurance enhances user productivity. In this regard, costs saved due to compatibility, patching, calls and user training all contribute to increased time that IT administrators spend to increase their outputs. Administrators exploit opportunities offered through Software Assurance to limit their downtime, solve help desk challenges and save on training time.

There are also other additional benefits associated with Software Assurance. For instance, clients can be able to predict and manage their IT costs. Clients have opportunities to manage costs on long-term basis and defer costs, which they may pay later. As a result, Software Assurance is an opportunity for companies to predict and manage IT costs. Firms may be able to predict their software expenses due to payments of upgrades in advance and could easily determine payments for the subsequent few years.

Organizations with Software Assurance programs have chances to stay current with new release and updates. They improve system compatibility with other released later versions.

Firms should focus on return on investments when considering Software Assurance programs. According to a study by Konary and Randy, the break-even point for Software Assurance is normally realized within the first year (8). Companies can therefore save significant costs related to IT expenses annually if they opt for Software Assurance as concluded by Konary and Randy, who claim that the returns may be easily realized within the first seven months of investments. Further, Microsoft has been able to reduce costs of Software Assurance during economic downtime to maintain its customers. Such strategies offer huge cost-saving opportunities to customers, and even its critic, Paul DeGroot concurs that it is painless for companies under Software Assurance (Lai par. 2).


Software Assurance programs have been criticized for their failures to meet customers’ expectations (DeGroot par. 2). The value of Software Assurance should be realized through timely release of new updates to allow customers to implement them. This timing, however, has been a major challenge and has rendered this upgrade insurance program useless to customers and critics (DeGroot par. 4). Customers, therefore, pay for nothing under Software Assurance arrangements and incur losses due to prolonged periods for new release.

Several factors affect the release of new updates, which could upset users and undermine the business significance of Software Assurance, particularly when clients require them. The Enterprise Agreement is the most common source of Software Assurance and license agreement for many consumers. Companies must have at least 250 desktops to qualify for the Enterprise Agreement (Konary and Perry 8). This implies that Software Assurance has left many small companies out who tend to purchase software on an ad hoc basis. On the other hand, large firms that do not use the Enterprise Agreement to purchase software, a decision to purchase Software Assurance would raise the cost significantly.

Given the complexity of Software Assurance terms and conditions, it could be extremely difficult for many end users to exploit such opportunities. A lack of awareness and utilization of such opportunities bar organizations from realizing its full benefits and potentials. For instance, many IT administrators may fail to participate in training programs. DeGroot concludes that end users who religiously purchase Software Assurance end up spending more in three years than others spend.


This position paper argued for Software Assurance costs and that it was imperative for organizations to conduct a systematic return on investment analysis for Software Assurance costs to determine the significant cost reduction, enhance their understanding and applications of the Software Assurance opportunities.

One must recognize the importance of computers and software in modern world. As such, it is vital to have reliable software to run computers. However, software programs could have dangerous defects that could affect user confidence and reduce investments. Software Assurance provides confidence to end users and promotes safety, security and reliability of the product. Most importantly, it is noted that software vendors continue to strive to improve their products and offer the best value for investments under the Software Assurance programs. This is imperative to retain consumers and develop confidence in the product and vendors. Further, the position paper asserts that firms that rely on Software Assurance are most likely to realize significant benefits under the Software Assurance agreements and thus values from investments.

It is imperative to note that deriving benefits from Software Assurance requires the participation of both vendors and end users. Vendors must provide affordable costs and make the program relevant to customers’ need. Conversely, end users must exploit advantages offered through the program.

The major challenge to Software Assurance is the timing of the release of new versions or updates and complexities associated with determining returns on investments. Vendors may fail to release updates during contract periods while end users may fail to upgrade their systems with new releases. This implies that end user education on Software Assurance is required. Abilities to determine costs and returns could help many organizations to end ambiguities related to Software Assurance. At the same time, software vendors should also review their pricing strategies and facilitate the derivation of value from their products. When users understand benefits to be obtained from Software Assurance, they will gladly exploit them. It is also necessary for vendors to educate their clients on software risks so that they understand their threats and impacts alongside the basis for Software Assurance costs.

Overall, Software Assurance cost emphasizes the relevance of products, potential new developments and the recognition that products may fail and updates would be used to improve reliability, security and safety. Hence, updates or new releases can easily be absorbed through Software Assurance costs without major financial strain on organizations.

Works Cited

DeGroot, Paul. Sticker Shock: Software Assurance’s fourth deadly sin. 19 May 2011. Web. 24 Jan. 2015.

Konary, Amy and Randy Perry. The Business Value of Microsoft Software Assurance for Volume Licensing. Framingham, MA: IDC, 2011.Print.

Lai, Eric. Microsoft slashes Software Assurance maintenance costs. 2009. Web.

SCO Group, Inc. Total Cost Of Ownership Analysis: SCO UnixWare®, Microsoft Windows Server 2003 and Red Hat Enterprise Linux. 2004. Web.

Software Engineering Institute. Software Assurance. 2014. Web.

Woody, Carol, Dan Shoemaker and Nancy Mead. Foundations for Software Assurance. 2012. Web.

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