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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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First of all, it has been an interesting journey during my SAM career to get to write this post…because I have spent so much time helping companies and organizations “clean up the house” and get compliant, manage their applications and protecting them in the way of being always ready for software audits. But like the best things in life the journey does not have an end and is the ride that makes it great.
In the SAM World the ultimate efficiency is to manage applications from the deployment of images to usage control with compliance in between. It is precisely on this SAM ultimate efficiency that allow us to be more proactive in order to not only be ready for software audits but also to advance the reporting to a vendor before reaches to audit… I know, I know, sounds sacrilegious.
Let us put together this scenario: one organization uses a SAM governance management for all applications, policies and procedures are well-defined, smooth and there is compliance control. To “cleaning up the house” is easy and give it a year to achieve the optimal position. It is now a matter of maintaining, adapting and advising. It is then that risks are fully controlled towards software audits. And the services are rendered by a certified and recognized independent SAM consulting firm, not by a reseller. Imagine then that the organization reports voluntarily their compliance that includes deployment information.
- Vendor does not have to list the organization on the black list
- The organization tracks reports delivered to provide “good faith” to auditors and avoid their time-consuming engagements
- The organization is motivated and keeps SAM governance live, active and constant maintaining compliance to optimal levels
- Vendors provide funding for voluntary reporting, services by the SAM consultant may be partially covered if not paid in full.
- SAM consultants can focus on the upcoming projects, working with IT architects and other to prepare for changes and ensure healthy delivery and compliance as per the established road map.
What we need is an alignment between the vendors, the SAM consultants and the customers. It has to be driven by the Vendors primarily, creating clear programs of audit protection by voluntarily reporting, enabling independent SAM consultants to provide a level of trust and optimal reporting acceptance. And this is out of the scope of the True Ups and Renewal typical reporting,,, Cloud subscriptions actually fit well on this model as usage can be controlled by the access to the applications from the vendor, but more than ever, the reality of Hybrid Cloud could benefit this approach tremendously, increasing the trust between all parties involved.
Just a thought…
The New Order
Microsoft is definitely the great influencer of Software licensing; when Microsoft develops and promotes new rules may other vendors follow. During this last World Partner Conference, that just happened in Washington DC, I observed the influence of Cloud now directly affecting the Software Asset management (SAM) approach.
Cloud and SAM
Not long ago I was questioned by other SAM peers on my approach towards Cloud and SAM, the interaction of the old licensing models affected by the new subscription models seemed for some the end of the need of the licensing advisors, however I always thought it was only an adaptation of the SAM knowledge towards new exciting models to compliantly license software.
Microsoft is going all or nothing to the Microsoft Cloud offerings, I am glad that my guess has been right for so long with respect of being aware on how to measure, what to investigate, and how to determine the right Cloud licensing solution, because now SAM has to fulfill the qualification to move the right IT budgets towards Cloud in order to fulfill the great demand and transformation that Cloud is making in organizations everywhere. SAM has now a special role in regards to Cloud, it has to monitor the usage, contemplate the rules and repurpose licenses for an optimal transition.
SAM and Services
Some SAM professionals identify their task as auditors as the more relevant with respect to the services thy offer. However I disagree, in fact SAM has to be hand in hand with technical, and business assessments to actually not only portray a licensing position but to guide any organization to transformation. The new era of SAM services has to require a true alignment between business goals, technical requirements and licensing.
SAM is now critical in order to govern software and identify the possibilities of Cloud computing, outsourcing databases, access to BI integrated products, assessing security tools and allowing a new perspective of IT expenditure that walk with business objectives. The New Order of SAM services will create once again a differentiation between those that will be stuck in the old reseller ways, just contemplating the exercise of an audit without any other variable added, and those that understand the new realities and needs of IT on today’s market.
IT is truly a great moment for SAM services that can play a significant role on the era of Cloud.
“The Licensing & Cloud Guru” new addition to the AMTRA team.
Calgary, AB, March 7, 2014– Amtra Solutions appoints Josef Hans Lara as Director of SAM & Cloud. Josef, also known for his online presence as the “Licensing & Cloud Guru” through his publications, speaking engagements and social media presence will direct the Amtra SAM efforts bringing an innovative way to offer AMTRA clients the best of Software Asset Management and Cloud transformation.
Josef depth of experience started in Europe leading the marketing and sales efforts on hardware and software licensing channel and solution sales in Europe. Continued building his career in North America becoming a builder of award winning Large Account Resellers, SAM consulting services and an evangelist for Cloud Computing.
Josef vision on SAM goes beyond the standards and provides synergies between application management, IT infrastructure transitions like Cloud computing, and a full understanding of compliance for multiple software vendors. Josef’s work has given him presence and reputation in the IT industry as a leader, helping multiple industry and public sector organizations across Canada, USA and Europe to achieve compliance and embrace models to adopt new technologies, truly approaching Business Intelligence to IT SAM compliance models.
Currently is a member of the Ingram Micro Services Advisory Council North America, IAMCP Canada National Executive, SRC Technology Group BC, and serves as a volunteer economic development commissioner in Maple Ridge, BC.
AMTRA Solutions is a North American leader on Application Management and IT Innovation. Our consultants are highly seasoned application packagers, developers and deployment & operations experts – each with several years of experience. They have all worked within strict and demanding environments such as Petrochemicals, Energy, Banking, Finance and the Pharmaceutical industries. We understands the importance of adherence to standards and industry regulations
AMTRA is the North American distributor of all ATEA software and services. Products include Application Manager, JumpStart, AppMarket and Service Market. ATEA is known for their high-end, high capacity client management and application packaging factory which is the largest of its kind in Europe.
If you would like more information about this topic, please contact 1-855-326-0533.
Windows 8 (8.1) is a single experience for all devices. It works for some people, not really for me, I like different experiences in life. Despite my personal taste on OS use, the premise behind Microsoft’s OS campaign is that one single OS can deliver the same experience on a phone, pc or tablet.
Microsoft has done a very good job at owning the OS market for many years on the pc side. Today’s evolution of devices claims a more open market. We have “phablets”, tablets and phones doing more tasks we used to do on a pc than ever before. We chose devices qualifying them for more than we used to… the graphics, size, entertainment purposes beyond work, cameras, level of connectivity etc…
As we evolve on our use of multiple devices I imagine that having a “single experience” across all devices must be a very good premise to capture market as Microsoft marketing strategy, however going back to basics, like many years ago, we should get the device we like because of the functionality we seek.
In some cases Android devices have the perfect attributes for certain jobs, still for work purposes I would prefer to combine a Windows OS on the same device as my Android OS. Taking virtualization to the device even the mobile device and tablet will help us to use them in different scenarios in life.
As the revenue war is driven more towards Office 365 these days. Productivity tools should be available on any OS. And I know that what I am asking here is hard.., but it will be so much interesting, flexible, and user-friendly if we could obtain the OS separate from the device, or add to it a partition.
I heard rumors that this is coming to the mobile world. I wonder how OEM OS licensing rights will change to enable a new reality… Diversity.
In different geographies Microsoft has asked LSP (Licensing Solution Providers) previously known as LAR (Large Account Resellers), to answer RFPs to maintain their status to transact Enterprise Agreements, and other higher licensing agreement transactions.
The idea behind is to recognize those partners that have done investments on Services offerings that can provide value to Microsoft customers beyond the transaction. Passing the test will mean the continuity of operations as LSP, failing means “out”, at least is what I get from my conversations with LSP friends across the globe facing this situation or from the ones that faced it recently.
I wanted to share some of the comments from this Microsoft partners:
- Revenue expectations pushed for volumes of sales beyond any services: The targets are aggressive, nothing new, but drive the behaviour of selling and upselling instead of consulting and servicing
- Cloud open to other reseller types is very competitive: VARs and others can help clients subscribe and get fees even when there is an LSP transacting an agreement. This also means that VARs better prepare for professional services offerings can be very competitive and if their alliance is with a competitor LSP then the relation with the customer may be at risk
- Global LSPs seem to be more attractive to Microsoft than national LSPs: selling agreements across borders is becoming a common practice especially when savings on price lists are so different between countries.
- Hardware Surface revenue target attempts are “distracting”: Some folks are wondering what kind of partner Microsoft has truly in mind in the new shift to a Device+SaaS company model.
- Fees cuts patterns, cadence and CRM type registration programs: For many years LSPs did not have requests to register deals and obtain fees from entering opportunities and properly track them on Microsoft CRM systems. Also LSPs have experience reduced fees for the same revenue as the partner programs have changed.
The common topic I heard is that the future of LSP as it is today is uncertain, if the new Microsoft RFPs and expectations changes will look for global LSPs then there was not much need for IT services afterall, and the Cloud has broken the boundaries between LSPs and the rest of partners in order to fulfill licensing needs specially in the shift to subscription licenses.
Interesting times!!!… for the LSP community