Ending Your Enterprise Agreement

In the last decade, many vendors have championed their licensing model to create agreements that encompass all software licenses used by their clients. These are commonly known as Enterprise Agreements. The front-runners of these types of contracts have been Microsoft, Oracle, and VMware. Resellers with specific requirements were able to offer these and typically included a long-term commitment, one to three years, and a bundle or suite of products with a minimum payment in annual basis to qualify and take advantage of the discounts and benefits.

You may have one or a few Enterprise Agreements today. This post intends to provide some insights of what I have observed in the licensing management and decisions over the last four years. Now with a wide range of different industry experiences and having collected experience from a good number of cases is time to put forward some ideas that may help you on your decision to either retain or end your Enterprise Agreement (EA).
I chose the title thinking on the reality I face most of the time, many organizations are decided to “end” their EA but are unsure of how to approach it or the unforeseen consequences to doing so. Most of the reasons to end an EA come from a change in how IT budgets are allocated especially as more and more Software as a Service (SaaS) options are available and widespread use.

Ending your EA may provide immediate budget release.
It is true; you may save a significant cost for our IT expenditures immediately. Sometimes the savings are very compelling, especially when choosing different technologies or moving software to be of Cloud-based consumption. Be aware that you may lose the renewal discounts and additional benefits. Resellers and vendors like to use “scare” tactics, but the reality is that their Cloud subscription offerings are antagonizing with their EA licensing model.
Ending your EA can affect legacy software updates. It is true if you require to maintain old versions of software understand that new licensing models may not include support to the versions you are interested in using.
Ending your EA will negatively affect my services rates from my resellers and Systems integrator provider; this may be true; however the low margins on reselling licenses make that transaction not a hard line to continue obtaining the rates you want for services.
Ending your EA can cost more to maintain licensing information than keeping it. Not true, in fact, many resources are dedicated to controlling EA media access, licensing inventory reports for True Ups and renewals. By having everyday administration skills and especially enjoying a “pay for what you use” subscription model you can decrease the cost of maintaining and administering software licenses.
Ending my EA will make my Cloud subscriptions more expensive; this may not be true, depending on the vendor. However, in the last two years, I have not encountered a situation were a volume Cloud deal was not discounted with same or even better pricing that keeping subscriptions advantages because you maintained your EA. In many occasions, vendors are asking large sums for “bridge” licenses with Cloud that make no sense financially or even legally.
Ending my EA will trigger an audit. Not true, the reason why I say is not true is because you will have to go through an audit anyways at the end of your EA, so its right way to do a bright start on your new way to consume licenses instead of maintaining the EA.
I have a Cloud EA and is it the same as a regular EA? Actually it is almost the same thing, and I would say that EAs for Cloud also have a minimum consumption model, you will be surprised to know that Infrastructure as a Service (IaaS) EAs are not very popular anymore as the competition for IaaS is fierce and the EA is actually more expensive than just consuming in many scenarios.

Recommendations:
Analyze the savings of ending your EA versus consuming the same software in a subscription model.
Do not limit to your current reseller the ability to provide you with subscription licensing, in fact, today, for example, Microsoft Cloud Service Providers (CSP) partners can offer same if not better pricing and services options than traditional resellers.
Think about how long you are planning to use the most recent versions you are entitled to.
Prepare for an audit at the end of your EA.
Negotiate transitions and other smaller agreement options for legacy licenses moving forward, like on-premise server licensing.
Do not trust Cloud EA, think carefully about the commitments.

Conclusion:
EA, in my opinion, is not an optimal licensing model, it is better to enjoy subscription licensing and other options. A company that no longer has an EA has probably more options ahead than the ones that have EA. And for any additional question, you can always contact me for further analysis.

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You will be Audited

Sounds like a title for a doomsday licensing movie… however besides the dramatic title it is very certain that if you are an organization using software, specially from the usual suspects: Microsoft. Adobe, Oracle, IBM… you will be audited!!!

Is written on the terms and conditions you may have not read when deploying the software, or on the contract the reseller provided you to sign. And as a practice to ensure compliance the software vendors periodically will request from you licensing information to make sure everything is alright.

Now… to fall in non-compliance situations is very easy:

  • Many software vendors don’t restrict the use of software to avoid misuse.
  • Many organizations don’t track licensing use and compliance with Software Asset Management Tools
  • Licensing rights, terms and conditions are subject to change, and they change often!.

For this reason through AMTRA Solutions and its partners, plus this blog I will start a campaign of awareness and practical examples plus Q&A to help you be prepared and ready with the information gathered from my experience. I consider that a “fair trial” has to be performed when all parties had fully knowledge of consequences and clear understanding of complexities. Stay tuned for more content and invitations to listen and see coming up.

Cheers

The Licensing Guru: Josef Hans Lara

“The Guru” joins AMTRA Solutions

AMTRA SOLUTIONS appoints Josef Hans Lara as Director of SAM & CLOUDAMTRALogoFinal_FullColor (1)

“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.

About AMTRA

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.

EA transition to Office 365… time to discuss

There are two ways to move your Enterprise Agreement (EA) to the Office 365 subscription

Obviously is an important topic these days as it is difficult to understand how you will be able to continue your EA investment and control costs during your way to the Cloud.

Every Office 365 plan as an equivalent on the CAL side to your EA, if your EA includes CALs. If you transition to an equivalent during the term then there is no increase of cost. However if you transition to an Office 365 option that includes more than your current EA you will incur into additional costs however highly discounted.

So basically there are two options for you

  • Move to Office 365 on equivalent subscription and continue annual payments until renewal
  • Increase licensing at a discounted price

True licensing experts could help you on the transition (ask me how @mslicensing or email me)

it is important to evaluate what can go Office 365 and which licenses will have to remain on the EA, specially if you create a hybrid model on your infrastructure.

All is possible…

 

Audited!!!! the balanced role of the licensing professional

Audited!!!! the balanced role of the licensing professional.

As a non regulated profession you find many types of licensing professionals, read my previous blog Types of licensing Professionals

Time and time again I have been engaged to consult on an audit that is requested right after another licensing professional involvement, specially from a vendor. Audits made on the suspicion of non compliance are normal these days when more software vendors are fishing for dollars disrupting with inquiries even the smallest of the companies.

It may not be the licensed professional fault at all that a company gets audited, however certain good practices can be established upfront:

  • The clarity of commitment to represent a costumer or a vendor
  • The clarity before  the customer and vendor to find the right solution
  • The explanation of duality of representation when exists.

The reality is that a narrowed minded vision on a licensing professional can harm as the advice should not be bias to certain goals, and it is key to establish trust and reputation in order to succeed and provide the right solution and advice to an end user costumer as well as the vendor.

Vendors should also understand that independent licensing professionals also work in the partner ecosystem and the best solution for their customers is the ultimate goal.

Specially the duality of representation is common in licensing engagements. A clear understanding on dual representation should be upfront and explained to the customer. I was reading a dual representation document that could help on this kind of situations, taken from real estate example that i edited as if it was for a licensing exercise:

“With regard to client confidences, each of you (Vendor and customer) should realize that the licensing professional cannot keep
information confidential between you, since the licensing professional is serving both of you. Therefore, by
requesting dual representation, each of you is authorizing the licensing professional to reveal each of your
licensing information, contents of documents and other disclosures and information to
the other.
After considering these factors, each of you must decide whether the licensing professional will continue to
represent both of you in connection with your licensing exercise planning, renewal or audit and related matters. If in the future
either of you wishes to have the advice of a separate licensing professional, you can do so.”

I think we apply the old rule that the costumer is always right…, (plus presumption of innocence, ) and regardless of being in two sides of the coin a licensing professional can dedicate the talent to the client with a balance for the vendor if has the right approach for both.

 

Office for Home & Student cannot be used in a Business

Office for Home cannot be used in a Business
the Terms and Conditions are clear, and with the upcoming release of Office 13 that will surely have a free upgrade path buying a PC in the next month or so some businesses may delay pc purchase
Volume Licensing with Software Assurance will grant the upgrade right for businesses.
I recommend a quick read to the following blog

 

Home and Business edition has no limit of users but cannot enjoy Volume Licensing rights for imaging for example.

Be careful with what you buy
http://blogs.msdn.com/b/mssmallbiz/archive/2008/12/01/9160762.aspx

Old news seem new. Calculate an EA

English: M in blue square (similar to seen on )

English: M in blue square (similar to seen on ) (Photo credit: Wikipedia)

I landed in this article : http://rcpmag.com/articles/2012/08/30/microsoft-raising-ea-licensing-renewal-costs.aspx

I found that telling people today about Software Assurance (SA) renewal is 40% of the cost of the previous deal on the EA can deceive, is old news.

Old news, no news.

However, when making assumptions of cost of EA versus others for the first time or not. I recommend:

  • Ask the LAR to get an official quote from Microsoft
  • Compare it to a Select Agreement quote and Open Value (Open Value will be more flexible on total quantities to license)
  • Determine the upgrade cycle you want to have on applications and OS. This will determine if SA will make sense for you. the magic number is 5, is your cycle is within 5 years you will be able to make use of SA better than if your cycle is longer.
  • Compare it to host it with a provider, include your hardware and maintenance cost to a provider that can offer you SPLA licensing (Service Provider Licensing Agreement). Licensing specialist trend to forget Cloud is out there.
  • Compare it to Office 365 upfront costs or included on the EA quote

Get an estimate quote of the SA renewal. then consider the following:

  • Microsoft increase prices around 3 to 5% per year
  • Microsoft goal to increase the revenue on every EA on 30% (add this to your EA renewal cost), by selling oyu new bundles, support, and new amendments.
  • Evaluate your Cloud projects in case things on your EA today will be Office 365 or other in the future.

Not all actual Microsoft or former Microsoft employees know about licensing, and not all specialists have the same experience.

Make sure your dollars on consulting are spent with sense, there are good contract managers out there but not licensing experts; unless a good IT architecture overview is done about licensing there is no real good job about advising on licensing.

Is not about purchasing strategies is about compliance, and enabling software access as YOU want.

It is messy business, visit my services page for help or email me for inquiries.

 

The Future of Licensing

For a while I have been pondering on the subject and I am convinced that the subscription model will gain momentum with the new focus on mobile devices that will connect all data anywhere. This means that a new licensing structure will emerge from the SPLA and other Service provider subscription model and it will contain a risk factor for vendors. Basically the vendor that evolved a perpetual license into a subscription model seemly will gain the approval and recognition fo clients and push their technology. Those maintaining a perpetual rigid structure that don’t make the transition easy will suffer from disapproval and abandon. Today EA from Microsoft can be amend to offer Office 365, however a full transition and benefit of terms and conditions are not there yet. It will require a different way to see True Ups and renewals. VMware and the RAM count is a good idea but very difficult to track, it will require a better trust on the client and a purely core or processor license subscription instead.
Vendors have been thinking “Data Center” when designing the Cloud, and that is ok, however they need to understand that the private cloud or the Hybrid cloud does not like or understand the subscription models that don’t allow multiple licensing models to “co-exist”… just my opinion

Video – Core CAL New Feature Announcement

Big Announcement of merge VL or traditional Licensing with OnDemand or Cloud Licensing

Microsoft has listened to the partner community, just announced in the Microsoft Hosting Summit

Amazing announcement on licensing today

Effective July 1st

Servers VL now able to move to cloud with SA.: First step to merge the traditional licensing world with OnDemand or Cloud licensing based on SPLA program. This is a big step as will allow many clients with EAs to leverage the licensing investment. Long View as Hosted provider can use Lync, Sharepoint and other technologies for clients who already paid for the licensing in the traditional way. The key is that the client must have Sotware Assurance. More details to come.

Products include SQL server, Exchange Server, SharePoint Server, Dynamics CRM

SALs for SA enhancement.

System Center Usage for Service Providers:

Single “pane of glass” via single console across SPLA & VL devices

Introduction of Core Infrastructure Suite for Service Providers

Removal of Outsourcing SKU for Win Server

Eliminating Scenario restrictions on “non-outsourcing”: SKU

Cover all scenarios, at a lower cost for windows server licenses

This first step is going to protect Microsoft EA from moving completely out to the Cloud and consequently not renewal however it may actually potentially move EA renewals to Cloud solutions. We will see how the CAL is developed but definitely is a shift on the licensing complexity to actually make it more simple (finally!!) kudos to the Microsoft Hosted team for pushing this change, specially Microsoft sponsors of the changes like Bob Kelly Corporate Vice President Server(who made the announcement)  and Tools Business and Marco Limena Worldwide Communications Sector.