Since the Cloud offering of Office 365 the inconsistency of licensing purchase methods is increasing. Enterprise clients have extensive agreements with Microsoft and have maintained them for decades, however the subscription licensing has been obtained in a very confusing and additive way instead of substituting the volume licensing agreements.
First it was the Cloud addition and “bridge” licenses within the same document contracts that increased the cost, not equal or save costs to customers.
Flexibility offered by the Cloud subscription model was compromised because these old agreements had to be maintained. Microsoft could have adopted a better transition just by allowing flexibility in the licenses within the agreements when clients deployed Cloud services, it could have provided an incentive to Microsoft clients not only to license but to deploy the Cloud technologies. Instead Microsoft added costs, and pushed clients to move to the cloud within a difficult transition that will eventually fulfill the promise of being flexible.
Currently the increase to 500 users to have a large agreement, the introduction of the MPSA agreement, the discontinuation of enrolments that were sold as ultimate solutions in the last 3 to 4 years have become not only a product licensing complexity but also a management chaos for organizations in the enterprise with multiple offices, affiliates and moving numbers of workforce.
Google has offer consistency as a cloud subscription model for working tools, and has allow other vendors interacting with Google Apps for work. It is in a collaborative way that Google and other vendor partners can offer security, data jurisdiction, access to robust data servers and integration with multiple ERP and CRM systems. Google has understood of the opportunity to gain market share in the Enterprise and has started offering new interesting approaches.
The dichotomy I see is the following: Microsoft offers an All-in approach to technology buyers through complex agreements while Google offers “buy what you like” with Google and “friends” subscription models, independent to each other, including Microsoft products and Azure services.
To manage compliance and mitigate risk is better for enterprise organizations to pay for what they truly use, measure its performance and use and adapt budgets accordingly.
I am observing companies deciding on their Cloud services consumption based on flexibility and less management burden on compliance risk. The Cloud is standardizing security, integration, multiple levels of vendor to vendor development and common market approaches… it will be difficult to justify complex licensing contracts the more collaborative are the services offered in the Cloud.
Microsoft could invite more vendors to sell collaboratively on flexible plans, otherwise Google may win the presence in the Enterprise.
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