The core premise behind SA is to give users the ability to spread payments over several years, while offering "free" upgrades to newer versions during that time period.
Microsoft differentiates License and Software Assurance.
The development period between major operating system versions often exceeds three years, requiring customers to renew their software assurance for another contract period, in order to get the next upgrade for "free".
Software Assurance was part of Licensing 6.0 and initially only provided upgrades, but around the time of the Microsoft Office 2003 release, more benefits were added.
In June 2011 Microsoft added Windows Thin PC, a desktop virtualization application that allows locked down versions of Windows 7 to run on older hardware.