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The Wrong Time to Make a Big Choice

Customers are often forced to make a choice about SA at the worst possible time

By Paul DeGroot
Principal Consultant
Pica Communications

Imagine that you have just purchased a new-model car. You've signed the contract, figured you could afford the monthly payments and are thinking Point B looks a lot better from Point A than it ever did.

Sales guy goes into the office, comes out with the keys, but says “before I give you these, I have a great deal for you.”

“What's that?” you ask, thinking he's going to throw in leather seats for another $50.

“How would you like to buy the 2015 model of this car, at a discount?”

“Why is that a great deal? Is there something special about the 2015 car? Maybe I shouldn't be buying this one.”

“Oh, no, you've just purchased a great car. In fact I have no idea what the 2015 car will be like.”

“Well, if I like this car, maybe I'll come back in 2015 and take you up on that discount.”

“Sorry, but you only get the discount if you buy the 2015 car today. We'll let you make payments over three years.”

“How big is the discount?”

“About 15% to 25%.”

“And what if I don't like the 2015 model?”

“Our shareholders thank you for your money.”

“Can I have my keys, please?”

For some reason, Microsoft doesn't expect customers to walk away from a “deal” like that one. I suppose if you paid $6 billion for aQuantive (now in pieces); $5 billion for an investment in AT&T broadband (whatever happened to that?); and made a $40-billion-plus bid for Yahoo (still circling the drain), you might go for it.

For most people who aren't suckers, however, pitching a customer on a bird in the bush at the same time they have one in hand seems likely to fail most of the time.

That's the way SA works, though. If you don't buy it at the same time (in some cases, with 90 days grace) as you buy a new license, you can't ever add it to your new license, even if the payoff is years down the road and you risk losing all the money you put into SA.

Not surprisingly, that deal attracted very little action in SA's early days, and Microsoft has had to sweeten the pot to get more customers interested. But you gotta wonder: who thinks hitting the customer with a big bill for an uncertain payoff at the point of sale is a good sales tactic?

Switch and Bait

Another way that SA's timing is spectacularly bad is when Microsoft makes significant changes to a product's version line-up and gives SA customers preferential access to a new, premium version.

The change is usually made just months before the upgrade is released, too late for customers who purchased the product a couple of years earlier. Had they known about the change in the product line-up at that time, they might have been willing to add SA to their purchase. All they can do now is rue their choice, not repair it. And while they lost a chance to upgrade, Microsoft lost money as well, on SA not purchased.

For example, Visio 2007 came in Standard and Professional editions, so customers who wanted the version with the richest features bought the Pro edition. They may or may not have elected to add SA to that license.

Visio 2010 came out with a different edition lineup: Standard, Professional, and a new Premium version that, for about twice the price of Professional, incorporated several cool new features. Many Pro customers were no doubt thinking "if they had only told me that they were doing this, I would have added SA to my Visio Pro license." But it was too late to add SA.

The moral: if Microsoft wants to maximize its SA revenue it needs to give customers a better heads-up about significant changes to the product lineup that could prompt them to take the gamble, rather than waiting until it's too late for them to get into the game.

Next: Small Upside, Big Downside

Seven Fatal Flaws of Software Assurance


Flaw 1: The Big Gamble
Flaw 2: The Wrong Time to Make a Big Choice
Flaw 3: Small Upside, Big Downside
Flaw 4: Sticker Shock
Flaw 5: Discouraging Upgrades, Encouraging “Good Enough”
Flaw 6: Making Microsoft Less Competitive
Flaw 7: A Complex Benefit Matrix
Suggestions for Change