Recent Changes to Microsoft Enterprise Agreements: Impact on Customers. Paul DeGroot Senior Consultant Software Licensing Advisors

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1 Recent Changes to Microsoft Enterprise Agreements: Impact on Customers Paul DeGroot Senior Consultant Software Licensing Advisors

2 Who are Software Licensing Advisors? Mission: Too The Customer s Advocate many customers rely only on Microsoft or a reseller, who focus on what they want to sell Leaves most customers with software they don't deploy or don't need While projects or investments with demonstrable ROI beg for funds SLA focuses on value and fit What you need to buy and the best way to buy it Align IT spending and strategies with corporate objectives and constraints "Your "Yourteam teamhas hasbeen been absolutely absolutelyfabulous..." fabulous..." --Fortune --Fortune consumer consumer products productsfirm firmthat thatreduced reduced EA EAspend spendby by60% 60% We Weexceeded exceededour ourexpectations expectationsfor for these thesenegotiations. negotiations.because Becausewe wehad had your intelligence, we knew what to hang your intelligence, we knew what to hang on onfor. for.you Youreally reallyshowed showedus usthe theart artofof the thepossible. possible. --Global --Global25 25resource resource company company Your Yourfinancial financialmodels, models,worksheets, worksheets,and and strategies strategieswere wereinvaluable. invaluable.outstanding Outstandingwork. work. --Global --Global pharmaceutical pharmaceuticalfirm firmthat thatreduced reduced3-3year EA spend by more than $30 million year EA spend by more than $30 million "I've "I'velearned learnedfar farmore morefrom fromthis thisengagement engagement than thani Iexpected. expected.you Youreally reallymade madeaadifference.." difference.." --High-tech manufacturing firm that reduced --High-tech manufacturing firm that reducedea EA spend by 50% spend by 50% 2

3 Today's Presenter Paul DeGroot, Senior Consultant, Software Licensing Advisors Independent analyst and consultant, covering Microsoft licensing for 15 years Developed licensing practice at Directions on Microsoft Creator and leader of the most comprehensive workshops on Microsoft negotiations and licensing Upcoming More workshops in Seattle (April 14-16) and Washington, DC. (April 29-May 2) information at Advised 300 hundreds of organizations on Microsoft licensing over the last 4 years to 125,000 seats Realized savings of $250 to $700 per employee, saving companies >$250 million Author of Microsoft Licensing Concepts Available on Amazon 3

4 EA Overview Midmarket A through global enterprise customers single agreement can cover multiple geographies Deepest Based Easy license discounts on count of PCs and/or users in the organization proxy for licenses All purchases include Software Assurance Primarily for perpetual PC software licenses Servers, subscriptions, & online services also available 3-year agreement Divides products into Enterprise, Additional, and Online Products Requires an annual count of licenses and true-up payments for any added since the previous count 4

5 Key Microsoft Licensing Documents Document Description Product Use Rights (PUR) Rights granted for on-premises products licensed through volume programs Online Services Terms Product use rights for online services Product List Which products are available in which volume programs Microsoft Business and Basic legal terms for most volume licensing agreements; Services Agreement verification of compliance ( Master Agreement ) Enterprise Agreement Definitions, how the EA works; obtaining, transferring, copying, re-imaging software; applicable use rights Enterprise Enrollment(s) Definitions; ordering requirements for various categories of licenses; true-ups; verification of compliance; pricing 5

6 Recent Changes to Enrollment Language More discretion for Microsoft Previous Terms Enrolled Affiliate may add new Enterprise Products by entering into a new Enrollment or as part of a renewal. New Enterprise Online Services may be added by contacting a Microsoft Account Manager or Software Advisor. New Terms New Enterprise Products or Enterprise Online Services may be added by contacting a Microsoft Account Manager or Software Advisor. [Enterprise products = products that must be licensed for all users or all devices] If Enrolled Affiliate qualifies for a different price level during the applicable initial or renewal term, Microsoft will establish a new price level for future new orders either upon Enrolled Affiliate s request or on its own initiative. If Enrolled Affiliate qualifies for a different price level during the applicable initial or renewal term, Microsoft may at its discretion establish a new price level for future new orders either upon Enrolled Affiliate s request or on its own initiative. 6

7 Mixing User and Device Licenses Previous Terms If ordering any Enterprise Products, Enrolled Affiliate s order must include coverage for all Qualified Users or Qualified Devices, depending on the license type, of one or more Enterprise Products or a mix of Enterprise Products and the corresponding Enterprise Online Services. New Terms...Enrolled Affiliate may elect to mix Enterprise Products and the corresponding Enterprise Online Services within a Product pool as long as all devices not covered by an Enterprise Product are only used by users covered with a per user license. Users of licensed devices (Windows and Office in a standard EA) must be kept away from devices licensed by user. Windows VDA (per user), Enterprise Cloud Suite, Office 365 ProPlus do not supply device licenses. Users without these online services subscription may not use devices on which user-licensed software has been installed 7

8 True-Up Changes: What to Count Previous Terms Enrolled Affiliate must submit an annual trueup order that accounts for changes since the initial order or last true-up order, including: (1) any increase in Licenses, including any increase in Qualified Devices or Qualified Users and Reserved Licenses; (2) Transitions (if permitted); or (3) Subscription License quantity reductions (if permitted). The New Terms Enrolled Affiliate must submit an annual trueup order that accounts for any changes since the initial order or last order. Enterprise Products... Additional Products... Online Services... Transitions... Subscription License reductions... word any was added to the changes that a true-up must account for License re-assignments? Movement of virtual machines to different hosts? SA reassignment? 8

9 True-Up Changes: How Much to Count Previous Terms Additional Products. For Products that have been previously ordered, Enrolled Affiliate must determine the Additional Products used and order the License difference (if any). New Terms For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the intial order, the last trueup order or the prior anniversary date and submit a true-up order that accounts for any increase. Instead of simply counting the difference between servers in use last year and servers in use this year, customers must count the maximum number of instances reached at any time. Retailers: Server inventory on Black Friday. inventory during major disaster or flue epidemic. Everyone else: constantly monitor use of each product to determine the moment usage hits the annual maximum Hospitals: 9

10 Verification: The Easy Way or the Hard Way? Previous Terms New Terms Microsoft, at its discretion, may validate the customer true-up data submitted through a formal product deployment assessment using an approved Microsoft partner. Verifying compliance. Microsoft may, in its discretion and at its expense, verify compliance with this Enrollment as set forth in the Master Agreement. Impact Impact Validation of true-up data Cannot happen before true-up No penalty except extra true-ups, at trueup pricing Validation of all license counts Can happen at any time on 30 days notice Auditor may demand access to customer systems If unlicensed use > 5%, then.. Customer pays for the audit Required licenses purchased at 125% of the usual price 10

11 What to do? Consider Select Plus or the MPSA Contract amendments No concept of Additional or Enterprise Products No companywide licensing requirement No SA requirement Maximum Use requirement easier to manage No need to track any change User licensing still available in the MPSA if you dare Assert prior language where beneficial Require ALL audits and validation for any product in the EA to happen in the true-up time frame With compliance achieved through true-up pricing, not punitive 125% 11

12 Software Licensing Advisors Services SoftWatch Detailed Software Asset Management insight into user interactivity guides negotiations and purchasing, particularly for Office Always-on service and real-time dashboards automate compliance License Reconciliation Software inventory and reconciliation with Microsoft Licensing Statement, customer purchasing records Essential service for audit defense and negotiations Knowledge Corporate Transfer Microsoft Licensing Workshops bring your people up to speed on MS licensing Retainer Ongoing Agreements access to Microsoft licensing expertise Microsoft Minimize Microsoft Audit Services Review costs and ensure accurate and relevant reporting from Defense Proactively define corporate licensing standards, protocol for audit requests Challenge Microsoft compliance demands M&A Evaluate assets and effective licensing position for due diligence during corporate merger or acquisition Microsoft Negotiations and Licensing Workshops How Microsoft products are licensing On-premises, Volume EA, cloud, hosted licensing agreements Server and Cloud, Select, MPSA Negotiation processes and strategies Special topics Mobile devices, hosted systems, MSDN, management tools, VDI, virtualization Seattle (April 14-16) Washington, DC. (April 29-May 2) More information at 12

13 Links White Paper Or Microsoft Licensing and Negotiations Workshops 13

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