Managing Microsoft Enterprise Agreements not as easy as you might think

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1 License Dashboard. All rights reserved.

2 1. Contents 2. Executive Summary What is a Microsoft Enterprise Agreement? Different types of Enterprise Agreements Other options related to Enterprise Agreements Managing an Enterprise Agreement It s not as easy as you think The truth about True-Ups Why are True-Ups so difficult to manage? How to make annual True-Ups less painful Why you often can t rely on the vendor or license reseller to manage the True-Up The benefits of using License Manager to manage Enterprise Agreements Monitoring platforms, not applications Don t forget the servers Not as simple as it looks Finding the right exit strategy Summary The Enterprise Agreement checklist About License Dashboard License Dashboard. All rights reserved.

3 2. Executive Summary For many medium and large organizations, Microsoft Enterprise Agreements (EAs) are viewed as the easiest way to procure and consume software licenses. And in many ways, that view is correct. Enterprise Agreements are a great way to bundle a lot of disparate entitlements into a single agreement which can, if managed correctly, deliver great value to the organization. But anyone calling Enterprise Agreements easy is also likely to be over-spending or leaving their organization open to compliance risks. To be truly cost-effective, Enterprise Agreements require close and careful management. This guide from the software licensing experts at License Dashboard will help you fully understand the obligations you must meet as part of an Enterprise Agreement. It will highlight the many challenges associated with EAs, from the risk of over-spending to the cost of poor management, and help you understand how a proactive approach to Software Asset Management (SAM) will help you realize the full potential benefits of an Enterprise Agreement. By the end of the document you ll realize that, rather than negating the need to manage your software assets more closely, adopting an Enterprise Agreement demands the adoption of SAM processes and technologies License Dashboard. All rights reserved.

4 3. What is a Microsoft Enterprise Agreement? A Microsoft Enterprise Agreement (EA) can be a very appealing way for an organization to manage their rights to use Microsoft s core products across the corporate network. For a fixed annual price, usually agreed across a minimum three year term, an organization licenses the use of products on all its eligible devices, thus simplifying budgetary planning and amortizing its costs across a fixed term period. 3.1 Different types of Enterprise Agreements Generally, most organizations require an Enterprise Agreement for their on-premise licenses, enabling them to use Microsoft s core device products such as Windows 8 Enterprise, Office Professional Plus 2013 and the appropriate Client Access Licenses (CAL). If you enter into an Enterprise Agreement, the products must be licensed on an organization-wide basis and will usually include one of the following platforms: Professional Desktop Platform: Windows 8 Enterprise Edition upgrade, and Microsoft Office Professional Plus 2013, and Microsoft Core Client Access License (CAL) Suite o Windows Server Standard CAL o Exchange Server Standard CAL o SharePoint Server Standard CAL o Lync Server Standard CAL o System Center Configuration Manager CAL o Forefront Endpoint Protection CAL Enterprise Desktop Platform: Windows 8 Enterprise Edition upgrade, and Microsoft Office Professional Plus 2013, and Microsoft E-CAL & Core CAL Suites o Windows Server Enterprise CAL o Exchange Server Enterprise CAL o SharePoint Server Enterprise CAL o Lync Server Enterprise CAL o System Center Configuration Manager CAL o System Center Client Management Suite CAL o Forefront Endpoint Protection CAL o Forefront Protection Suite CAL o Forefront Unified Access Gateway CAL Additional products and services are available and these can be added either initially or at any point during the term of the Enterprise Agreement, allowing organizations to adapt while still enjoying the volume pricing advantages and annualized payment options License Dashboard. All rights reserved.

5 3.2 Other options related to Enterprise Agreements In addition, with either platform you can also add the Microsoft Desktop Optimization Pack (MDOP) to help streamline deployment and device management, which is a must when looking to deliver solutions such as Virtual Desktop Infrastructure (VDI). In addition to the Enterprise Agreement itself, Microsoft offers optional Enterprise Subscription programs for organizations that want to subscribe to, rather than purchase, Microsoft products. Enterprise Subscription programs provide similar advantages to the Enterprise Agreement, but have a lower three-year subscription cost and provide the ability to increase or decrease subscription counts on an annual basis. However, unlike the Enterprise Agreement, if you decide not to renew, you surrender your rights to run the software unless you choose to acquire your licenses via the program s buy-out option. Microsoft also extends the product availability of the Enterprise Agreement via other enrolments that help your organization to license both application and infrastructure products. For example, it provides an agreement called the Enrolment for Application Platform (EAP) that provides a flexible and cost-effective licensing for standardizing on application platforms, such as SQL Server, Visual Studio, BizTalk Server, SharePoint Server. All of the Enterprise Agreement options are comprehensive and are flexible enough to meet most organizations technical demands. However, the management of these agreements should not be underestimated. As experienced by many organizations, entering into an Enterprise Agreement is simple. However, during the term of the agreement, Microsoft True-up demands do leave many shell-shocked due to sheer workload involved in meeting the reporting obligations that are central to the scheme (see Section 5: The truth about True-Ups) License Dashboard. All rights reserved.

6 4. Managing an Enterprise Agreement It s not as easy as you think In order to make a sound decision when committing to the terms of an Enterprise Agreement, a company has to do its homework. Without applying some due diligence prior to committing to a three-year agreement, this could end up being be a costly mistake. Knowing for certain what you have and determining what you really need is good corporate governance. But it is surprising how many organizations enter into high-cost agreements on the back of little more than guesswork. Ideally, organizations need to invest in Software Asset Management practices and technologies before committing to an Enterprise Agreement. As discussed in the License Dashboard white paper SAM: much more than Inventory, implementing an inventory/discovery tool alone will not provide the answers required to ensure the Enterprise Agreement is cost-effective. That s largely because most inventory tools are designed to audit the individual software components and not bundles or suites. In addition, tracking Client Access Licenses (CALs) is impossible, as they have no physical signatures to detect. And that s not to mention the fact that most inventory tools that claim some form of license management capability are often no better than spread sheets. On top of this, as many organizations virtualize their server environments, additional license management functions are required to manage the complex license rules associated with mobility and per-core licensing. Without some sort of process in place to manage these dependencies, it becomes impossible to effectively true-up, which leaves many organizations over-provisioning (and thus over-paying for) their license requirements. It is also critical not to underestimate the importance of communication or availability of accurate entitlement information. In larger organizations, it is surprisingly easy for IT staff to misinterpret usage rights or assume some products are covered by an EA when, in fact, they are not (see section 5.3) License Dashboard. All rights reserved.

7 5. The truth about True-Ups As part of the Enterprise Agreement terms and conditions, customers are normally obliged to perform an annual True-Up essentially providing Microsoft with an updated view of the organization s software use. Although the process of reporting the True-Up to Microsoft is simple in its own right, performing the calculations necessary to generate the report is anything but! This is because the True-Up obligation requires the organization to record a number of parameters through the year, including: Monitor the computer or/and employee (user) base growth Monitor the organization s usage within the server virtualization environment and report mobility activity Monitor the increase in server count and report the cluster configuration Management of servers for warm or hot disaster recovery Determine whether any users have transitioned from on-premise licenses to/from Online Services subscription licenses Monitor the pre-production environments and track what system software is being developed or evaluated Monitor the outcomes (usage and entitlement changes) associated to acquisitions and mergers But wait; there s more. To ensure both the Enterprise Agreement and wider Microsoft licensing are cost-effective, organizations also need to recognize and manage the additional software use rights that are provided during the term; these can include the following: Training and Evaluation Downgrade Rights Re-Imaging Rights Windows Virtual Desktop Access and Roaming Use Rights Windows Virtual Desktop Access Office Roaming Use Rights Home Use Program Support for Multiple Languages Microsoft Desktop Optimization Pack Continue to monitor whether any desktop applications, such as Microsoft Office Project, Microsoft Office Visio, Microsoft Office OneNote, or Microsoft MapPoint have been rolled out One common mistake made by many organizations is to fail to take advantage of Step-Up licenses, which allow you to upgrade from a lower to a higher-level edition, such as from Windows Server Standard Edition to Windows Server Datacenter, at a low cost. Rather than pay full cost for the higher-level software edition, Step-Ups allow you to pay only the pricing difference and still take advantage of enhanced features and technologies with premium editions. The True-Up process is supposed to be completed by the anniversary of the Enterprise Agreement, for each year the agreement is active. Many organizations fail to meet this deadline, instead taking License Dashboard. All rights reserved.

8 months to pull together the required information. This is not only bad for vendor relations, it also represents a huge unnecessary additional cost to the customer, as staff are pulled away from their day jobs to perform emergency audits and log file analysis. 5.1 Why are True-Ups so difficult to manage? It s fair to say that many organizations are not aware of the challenges ahead and enter into an EA without any consideration of how they are going to manage the True-up process. The first True-Up often comes as something of a shock to the system. The single largest contributor to slow and difficult True-Ups is the lack of a single comprehensive repository of both software usage and license entitlements. Without this up-to-date resource, most organizations are simply not in a position to make informed decisions. This can put the organization under immense pressure as they waste months trying to calculate the company s True-Up position, only to find out at the 11 th hour that they have no budget to meet the True- up s requirement. This ultimately frustrates the vendor, the designated reseller, but more importantly you the customer and as a result, due to lack of data and time, the company frequently Trues-Up incorrectly. Implementing effective SAM processes will ensure that the organization is able to manage the full lifecycle of an EA, ensuring that all contractual obligations have been adhered to and that all dependencies are continued to be monitored, thus enabling the organization to be in a state of readiness when they are required to do the True-Up or when the agreement is about to expire. 5.2 How to make annual True-Ups less painful For most organizations, the True-Up is viewed as an annual event which is an unavoidable pain. What organizations often fail to realize is that True-Ups in year two and three can be eased by keeping a more regular eye on the network through the year(s). SAM processes, complimented by the appropriate inventory and license management technologies make it far easier for organizations to quickly answer important questions relevant to the Enterprise Agreement, such as: 1. Are device counts accurate? 2. Have retired/decommissioned PCs been managed? 3. Do we know which are our Development/Test machines that should consume MSDN licenses, not expensive SQL/Windows 4. Are we monitoring active software usage for non-platform applications such as Project and Visio and re-harvesting rather than building up a large true up By having instant answers to the questions above, not only is the scramble for information at True- Up eliminated, it can also deliver continued cost-savings and efficiencies through the 12 months between True-Ups License Dashboard. All rights reserved.

9 5.3 Why you often can t rely on the vendor or license reseller to manage the True-Up To be clear, there s no suggestion here that either the vendor or reseller would act in a manner contrary to the organization s best interests. But just as with the customer, there can be a tendency to take the route of least resistance and as has been highlighted already, this can lead to a significant over-spend. The main problem is that the vendor and reseller are forced to work with the same information or lack of as the customer s organization. The vendor and reseller will both be trying their utmost to get the true-up done on-time, and so it would be wrong to assume that any results provided by them are more accurate than those generated by the organization itself. There are, of course, exceptions. Some Microsoft Large Account Resellers (LARs) now offer comprehensive SAM services (many of which are powered by License Dashboard technologies) which are designed to help collect the required data (outlined above) through the year and thus both speed up the true-up process and deliver a more cost-effective deal to the customer. Advice from the SAM experts - Knowing your renewal options Generally, your rights to use licensed products become permanent once your Enterprise Agreement enrolment term is up for renewal. Meaning you can continue to use licenses for the number of devices or users that you ordered during your term. However, as some organizations have found the hard way, there are some agreements that may not offer the same allowance, resulting in customers continuing to use software without the appropriate entitlement. For example, the Enterprise Subscription programs provide you with non-perpetual licenses and do not give you perpetual use rights unless you elect to purchase these through the program s buy-out option. Therefore, it is important that you fully understand your use rights during and on expiry of the agreement. When it s time to renew your EA, you will need to consider a number of options for enrolment renewal and these must meet the specific needs of your organization. If changes have occurred within your organization, renewal can become an immensely important process and it is imperative that you have access to the right licensing program. At the end of any three-year term, many organizations rely heavily on their authorized reseller or vendor to help them make the right renewal decision. However, without a clear understanding of the organization s current state of compliance, this is impossible for them to advise effectively. This usually leads to the organization renewing for another three-year cycle, which if the organization s technology refresh program is frequent, may be the right course of action, however, like many, if this not the case, they could be signing up to unnecessary financial commitment for another three years License Dashboard. All rights reserved.

10 6. The benefits of using License Manager to manage Enterprise Agreements License Dashboard License Manager has been designed from the outset to help organizations manage the complex requirements of volume licensing schemes such as Microsoft Enterprise Agreements, ensuring that an organization can report its effective license position for all products deployed. As has been highlighted earlier in this document, the costs of not doing so far outweigh the costs of acquiring and administrating a solution such as License Manager. 6.1 Monitoring platforms, not applications In its simplest of forms, reconciling a single license against a single installation of a particular product is not (in theory, at least) difficult to do. The challenge with Enterprise Agreements, however, is that organizations are tasked not with tracking products, but with groups of products such as the Professional Desktop Platform (which includes MS Office, CAL licenses and Windows 8 OS). This is a challenge because most inventory tools are configured to gather information on individual installs, not groups of products. This alone can cause many organizations to lose track of the total volume of platform installations and thus be forced to over-estimate their usage at true-up. In addition to this, software inventory tools alone cannot track the Client Access License (CAL) suites and therefore make it impossible to determine which suite to subscribe to. Microsoft offers two CAL Suites, the Core CAL Suite and the Enterprise CAL Suite, which provide access rights to a number of server products, therefore organizations need to careful when they assess their needs, an impossible task if you don t have comprehensive data to work from. As such, License Manager is designed to complement existing inventory solutions such as Microsoft s SCCM and MAP (and around 40 other inventory solutions) to extract information from them, which is then transformed by License Manager s in-built software recognition engine and library of licensable products into actionable intelligence. 6.2 Don t forget the servers If tracking software usage on desktops is difficult, then servers add a whole new level of complexity. To the point where many organizations bury their heads in the sand and drastically over-estimate their requirements simply to avoid having to do the legwork necessary to identify the real need. Thankfully, by working with data captured by MAP, License Manager can create reports on server usage information required to create an accurate baseline for the Enterprise Agreement True-up, by ensuring that physical and virtual environments are correctly reported and clustering configurations are accounted accurately. Without License Manager, the rules associated to these environments would be nigh-impossible to calculate and, more importantly, the format of the evidence required by Microsoft, could take months for an organization to finalize License Dashboard. All rights reserved.

11 6.3 Not as simple as it looks One of the proclaimed benefits of an Enterprise Agreement is that managing your compliance obligations is simplified. This is true, but only when you have comprehensive SAM processes and technologies in place. It is important to remember that not all Microsoft products are covered under the Enterprise Agreement and therefore it is essential that all other agreements (Select, Select Plus or Open) are managed in parallel, thus ensuring that all entitlement is consumed and managed effectively during the term of all agreements. There are clauses that prevent certain entitlement from being used during the existence of a superseded agreement. For example, allocating some previously-purchased license entitlement from a Microsoft Select Agreement to Enterprise Agreement products during its term is not allowed. Many organizations fail to True-up correctly and thus face costly and unbudgeted expenditure - because they have tried to use legacy license entitlement to cover Enterprise Agreement product shortfalls. 6.4 Finding the right exit strategy On expiry of the Enterprise Agreement, as mentioned earlier in this whitepaper, it is important that you establish what your overall effective license position is, prior to simply renewing your contract. Some organizations fail to review their current status, aligning it with the organization s future technology refresh schedule, and therefore end up committing to another unnecessary three years. For example, if your organization is running an earlier version operating system and Office suite and you have no intentions to upgrade to the latest versions, then you might find that the current perpetual rights associated to the expired Enterprise Agreement may be sufficient for the next few years. If this is the case you could take a holiday from the Enterprise Agreement and review at you next technology refresh, thus avoiding significant subscription cost in the future. If you decide not to renew your Enterprise Agreement term, it is essential that you re-balance your effective compliance position, breaking the platforms down to products and then re-allocating the associated entitlements to installs, rather than eligible devices. Thankfully, License Manager has been designed to facilitate just this kind of transition, with the ability to revert superseded licenses back to their pre-enterprise Agreement state in just a few mouse clicks. What s more, should the organization decide in the future to enroll in a new Enterprise Agreement scheme, License Manager can dynamically revert back again to platform entitlements across eligible devices. Potentially weeks of licensing work taken care of in just a few minutes License Dashboard. All rights reserved.

12 7. Summary There are many benefits to subscribing to an Enterprise Agreement to cover your use of major Microsoft products. But many of these benefits only reach their full potential value when the organization makes an investment in both SAM processes and the necessary technologies to reduce the administrative effort associated with license management. Failing to adopt SAM practices alongside an Enterprise Agreement will at best lead to over-spending. At worst, it will lead to major disruption to the organization as it scrabbles around and diverts important staff away from their day jobs in order to meet the requirements of the annual True-Up. And then it could still face unbudgeted costs as its actual usage (as it is likely to do) exceeds that allowed under the current agreement terms and budgets. Contrary to common beliefs, managing Enterprise Agreement licensing is not easy. But without an automated license management solution in place, it s a lot more difficult (and expensive) to manage! It s also worth keeping in mind that license management solutions are not purely for managing Enterprise Agreements. Most organizations have products from at least vendors on their networks (often a lot more!) and all of these license entitlements need careful management if they are not to end up causing either over-spend or potential compliance issues License Dashboard. All rights reserved.

13 8. The Enterprise Agreement checklist Are you getting the most out of your Enterprise Agreement? Ask yourself these 6 questions to find out? 1. Are you using the latest versions of all software covered by the EA? 2. Have you deployed all solutions covered by the EA? 3. Are you monitoring the use of high-value software such as Project & Visio? 4. Are you tracking EA bundles, rather than product installs? 5. Do all stakeholders have access to accurate entitlement information (what can and can t be deployed under the EA)? 6. Is the True-Up process scheduled into your annual IT management plan? License Dashboard. All rights reserved.

14 9. About License Dashboard License Dashboard has been helping organizations manage their software licensing since Combining class-leading technology solutions such as License Manager with a global network of SAM and licensing professionals, License Dashboard has delivered over 1,000 successful SAM engagements to large and small organizations. For more information, visit License Dashboard. All rights reserved.

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