Microsoft should release a 64-bit version of Office at the same time as its 64-bit version of XP - due by the end of the year - if it wants to attract more corporates to its Software Assurance licensing scheme, according to Rob Enderle of analyst firm Enderle Group.

Enderle said such a move could encourage more firms to sign up to Software Assurance now that Microsoft has discontinued its Upgrade Advantage licensing programme.

"It would make sense to have a 64-bit version of Office to release alongside [64-bit XP]," he added.

And moving Office to a 64-bit environment would allow Microsoft to eliminate security holes in the 32-bit versions. "Security has become the IT manager's biggest nightmare," commented Enderle.

"A secure version of Office would make Software Assurance a more appealing proposition."

A number of delays to Microsoft's next generation of products, including the Longhorn version of Windows, has led some corporate customers to question whether the firm's Software Assurance licensing package offers value for money, said Enderle.

"Annual subscription fees are a little like buying earthquake insurance: if you're pretty sure there aren't going to be any earthquakes then it's a bad investment," he said.

Large corporate users are likely to avoid Software Assurance unless they are given a more compelling reason to sign up, agreed David Roberts, chairman of blue-chip user group the Corporate IT Forum.

"Our members have their own upgrade cycles, typically five years. They don't want to be tied into the manufacturers' cycles, which are usually shorter," said Roberts.

With Upgrade Advantage no longer available, customers have three options when they are buying licences. They can buy them piecemeal, or by purchasing new hardware with the software bundled, or by agreeing to join the Software Assurance annual payment plan.

Microsoft said that Software Assurance was becoming more popular.

"Essentially it's all down to customer choice. But the early indications are that customers are moving toward Software Assurance," said Mark Buckley, Microsoft's UK licensing marketing manager.