Software Assurance is the part of a Microsoft license you pay for every year. What it buys you only becomes visible on the day you stop paying.
1. Two purchases on one invoice
A classic Microsoft server license comes in two parts. The license is perpetual: you pay once and may run that version for as long as you like. Software Assurance is an annual contract on top of it.
Microsoft does not publish one fixed price for SA in its Product Terms. Your price list sets it per product. For server products, a yearly rate of about 25% of the license price is the common rule of thumb, and this post uses it as an assumption.
SA has a narrow entry door. The Product Terms state that SA must be acquired at the time of acquiring the license or upon renewal of an existing SA term. Let it lapse, and the way back is to buy license and SA again. The only exception covers Enterprise Agreement customers who swapped SA for an Online Service or a subscription license.
2. What SA actually buys for Windows Server
New versions are the benefit everybody knows. For Windows Server, they are the smallest part. Microsoft ties a whole set of use rights to active SA, and most of them are invisible until a renewal question comes up.
- Licensing per virtual machine needs SA or a subscription. Without it, you license every physical core of every host. Details and the math are in our post on per-VM licensing.
- The CALs follow the server licenses. In the per-VM model, every CAL used to reach those servers needs active SA or must be a subscription. That includes the RDS CAL, which Microsoft lists as an additive access license with no exemption.
- Azure Hybrid Benefit and Extended Security Updates need SA or a subscription. Disaster recovery rights and the step up from Standard to Datacenter are listed as SA benefits.
- What you keep is fixed on the day SA ends. Licenses acquired through SA keep the right to every version released while the coverage was active, and nothing that ships afterwards.
3. Three ways to own Windows Server, and only one carries SA
Where you buy decides which column below you are in. SA exists in the volume licensing programs: Enterprise Agreement, MPSA, Open Value and the Server and Cloud Enrollment. Under the Microsoft Customer Agreement, both MCA-E and CSP, Microsoft does not sell SA. There, subscription licenses take its place.
Used licenses sit in the middle column. They are perpetual licenses without SA. The Product Terms allow SA on a transferred license only within 30 days of the transfer, and only if the seller kept SA active until that day.
- Runs after payments stopthe license is yours
- New versionskeeps all released under SA
- License per VMCALs need SA too
- Azure Hybrid Benefit
- Disaster recovery rights
- Extended Security Updates
- Bought usedSA only within 30 days
- Runs after payments stopthe license is yours
- New versionsthe version you bought
- License per VMevery physical core
- Azure Hybrid Benefit
- Disaster recovery rights
- Extended Security Updates
- Bought usedCALs too, within their version
- Runs after payments stopuse ends with the term
- New versionsper your subscription terms
- License per VMwith subscription CALs
- Azure Hybrid Benefitif the subscription qualifies
- Disaster recovery rightscheck your terms
- Extended Security Updates
- Bought used
4. One estate, two price tags
The example is a typical mid-sized estate: 4 hosts with 32 physical cores each, 60 Windows Server VMs with 8 vCores each, 400 users with a Windows Server CAL, and 120 of them working on Remote Desktop Services.
Prices are Microsoft's suggested retail prices in USD: Standard at USD 1'176 and Datacenter at USD 6'771, each for 16 core licenses. Your contract price will differ. The ranking rarely does.
| License + SA, per VM | License only, per host | |
|---|---|---|
| Edition | Standard | Datacenter |
| Cores to license | 480 virtual | 128 physical |
| 16-core licenses | 30 | 8 |
| License purchase | 35'280 | 54'168 |
| SA per year | 8'820 | 0 |
| 400 Windows Server CALs | with SA | new or used |
| 120 RDS CALs | with SA | new or used |
The license-only path needs Datacenter. Without SA the per-VM model is closed, so each host carries all its physical cores. With 15 VMs per host, Datacenter is the cheaper way to do that.
5. When SA pays for itself, and when it does not
Year one favours SA. From year three on, the SA path has cost more than the Datacenter licenses that never needed it. That holds for exactly as long as you stay on the version you own.
The picture turns when you need a new version. Without SA you buy every license again: the 8 Datacenter licenses, and the 520 CALs too, because a CAL only covers its own server version and earlier ones. One version jump in year five puts the license-only path above six years of SA.
Used licenses lower the purchase, not the logic. They shift the license-only lines down, and they stay license-only: no per-VM model, no Hybrid Benefit, no ESU, and every version jump starts at the market again.
In the EU, the Court of Justice ruled in UsedSoft v Oracle (C-128/11, 3 July 2012) that a perpetual license sold for a fee may be resold. The seller must make its own copy unusable, and a bundle of licenses cannot be split at will. Switzerland is not bound by that ruling. Ask for the full chain of title before you buy.
6. Five steps before your next SA renewal
- List what hangs on SA today. Per-VM licensing, Hybrid Benefit in Azure, disaster recovery servers, ESU. Each one is a right you lose on the day SA ends.
- Check the CAL chain. If any server runs per VM, every Windows Server CAL and RDS CAL behind it needs SA or must be a subscription. One lapsed CAL renewal breaks the model.
- Decide on the next version, not the current one. If you will move to a new Windows Server version within about five years, price SA against buying licenses and CALs again.
- Price the licensing model without SA. Without SA, every physical core is licensed. On dense hosts that is Datacenter, and the purchase can exceed years of SA.
- Know your program before you switch. Moving from an Enterprise Agreement to MCA-E or CSP replaces SA with subscriptions. Zation can help you compare the licensing scenarios before you decide.
Limits and exceptions
The 25% is an assumption. Your price list and program level set the real SA rate. Run the comparison with your numbers before you decide.
Datacenter scales differently. The license-only path above covers any number of VMs on those 4 hosts. The per-VM path grows with every VM you add, so a growing estate shifts the result.
Subscriptions follow their own terms. Version rights, disaster recovery rights and whether a subscription qualifies for Azure Hybrid Benefit depend on the subscription you buy. Check the offer, not the name.
Used licenses need proof. Microsoft can audit what you run. A used license without a documented transfer is a compliance gap, whatever it cost.
Questions for your next renewal
- Which of our Windows Server rights would end on the day SA lapses?
- Do all Windows Server CALs and RDS CALs carry SA wherever we license per VM?
- Which Windows Server version will we run in five years, and what would it cost to buy it without SA?
- What SA rate does our price list actually charge for Windows Server and CALs?
- If we move to MCA-E or CSP, which subscription replaces each SA right we use today?
- For used licenses: can the seller document the full transfer, including that its own copies are deleted?
Bottom line
SA pays when you use what hangs on it: per-VM licensing, Azure, disaster recovery or the next version. If you will run the version you own on hosts you fully license, SA costs more than it returns, and used licenses can make that path cheaper still.