Whether or not to sign or renew an Enterprise Agreement with Microsoft is a sticky question that many organizations face. For many companies out there, their spend on Microsoft licensing can be a significant portion of a company’s IT budget, whether it be Enterprise Agreements or Select License agreements. Some of you may be directly responsible for the negotiation of the agreement, but many more of you work with your sourcing professionals who negotiate the agreements with Microsoft or resellers. The increasing complexity around Microsoft licensing decisions require more heads at the table. For Infrastructure and Operations pros, your voice is critical in the decision process. Certainly, your current state of Microsoft products and your future rollouts over the life of the agreement (and beyond) play a role, but there are other factors to consider. Some of the other key questions you’ll face include:

How does Software Assurance impacts your current and future environment? When Software Assurance (SA) first came to be in the earlier part of the decade, it was all about upgrade rights — Microsoft did away with upgrade licenses and moved to an annual maintenance system to increase the predictability of their revenue. Over the years, in order to coax customers to make the investment in SA, they layered on other incentives like proactive support offerings including Packaged Services and rights to licenses for cold backup servers in disaster recovery scenarios. Some of the benefits are more valuable to some than others, and they’re worthless unless you consume them.

More recently, IT Pros now have to consider how Microsoft ties SA to certain versions of products like Vista or Windows 7 Enterprise, certain product offerings like Microsoft Desktop Optimization Pack (MDOP), and factors impacting the rights associated with certain products and the flexibility in which you deploy them. Desktop virtualization is one example — SA is a requirement in certain scenarios, like if you want to use a standard PC rather than a thin client terminal to access a centrally hosted virtualized desktop.

How does virtualization play a role in your environment? Whether it’s server, desktop, or application virtualization, they all play a role in your Microsoft licensing. One common oversight is, "I’m using VMware or Citrix instead, so there’s really no impact on my Microsoft licenses." A lot of the policies are virtualization vendor agnostic — meaning the Microsoft licensing requirements are the same regardless of the vendor used for virtualization. For instance, depending on the number of virtual machines running Windows Server on a VMware ESX server, you can save big money by purchasing Windows Server Enterprise or Datacenter licenses, which carry rights to run multiple Windows Server instances on a single server.

Are there clouds on your horizon? More and more companies are taking a harder look at the cost and complexity of running services like email themselves and looking at cloud-based alternatives from Google, IBM, and Microsoft to see if there’s a fit. One of the tensions here is how your existing licensing investments play a role, should you decide to take advantage of Microsoft’s online services, like Exchange Online. Again, whether or not you have SA on certain licenses impacts your cloud licensing options. For instance, customers with Enterprise Agreements can purchase certain cheaper subscription licenses. Another point that’s worth noting is your spend on Online Services does not count for the accumulation of Software Assurance benefits, like Packaged Service offerings.

In order to find the best-fit strategy for your organization, you need to bridge the gap between IT sourcing and IT operations. Together, you can lay out your requirements and options, so those responsible for negotiating the agreement can better understand the positions they take in the negotiation process. The result? A strategy that saves money, meets the immediate and future needs of your company, and helps avoid unexpected charges down the road that could have been prevented with careful coordination upfront.

By Christopher Voce

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