News Analysis: Microsoft Licensing Update - May/June 2010

Keeping Up With The Latest In Microsoft Licensing
Given the vast array of Microsoft products and licensing categories, an organization may often feel overwhelmed by Microsoft's policies.  While there may be some complexity, these series of posts are designed to provide up to date commentary and analysis on new programs as they become available.  Feel free to reach out in the comments section with any questions, comments, and clarifications on the analysis.
Product And Program News

  • Enrollment For Application Platform (EAP) Updates. What is it?:  The new updates include SQL Server 2008 R2, Visual Studio 2010, and SharePoint Server 2010.  SQL Server prices for EAP go up with Standard receiving a 25% hike and Enterprise Editions a 15% increase.  Customers who buy Visual Studio products with Software Assurance (SA) receive Microsoft Development Network (MSDN) subscription benefits.  SharePoint Server for Internet Sites is updated for SharePoint Server for Internet Sites Enterprise.  Who's impacted?: Customers who are standardizing application platforms on products such as BizTalk Server, SharePoint Server, SQL Server, and Visual Studio .  When's it effective?: This program begins May 3rd, 2010.
    Point Of View (POV): EAP is a program for customers interested in standardizing on the Microsoft Server Platform.  Price savings for new licenses range from 15% on Standard Edition to 40% on Premium Editions.  Overall, the program makes sense because it allows customers unlimited usage with annual or three year true up terms that create a flexible approach towards standardizing on Microsoft.  Other benefits include rights to the latest version of products and the flexibility to deploy unlimited incremental units.  Customers also receive 100 percent Software Assurance (SA) coverage on footprint for included products.  While the price increase on SQL Server is definitely not welcomed, this may be the time to look at Software Assurance (SA).  The new version does come with additional features such as data compression, Master Data Services, StreamInsight, and PowerPivot.
    On the Visual Studio front, customers will notice the replacement of the Visual Studio Developer Tools group with Visual Studio Ultimate with MSDN, Visual Studio Premium with MSDN and Visual Studio Professional.  Ultimate and Premium versions now count towards the minimum requirements.  Users also receive access to Visual Studio Test Professional, Visual Studio Team Explorer Everywhere.  Finally, the new plan replaces the Visual Studio Test Load Agent with Visual Studio Load Test Virtual User Pack.
  • Office 2010 and "Wave 14" Products Launch. What is it?: Office 2010 suite, Project 2010, Sharepoint 2010, Visio 2010, and the updated ECAL suite are now in the Volume Licensing channel in the May 2010 price list. Who's eligible?: All customers. When's it effective?: This program starts in the retail channel (FPP) when products become General Availaiblity (GA) in June 2010.
    : Movement to the Volume Licensing channel makes sense as Office 2010 and "Wave 14" products represent a core customer purchase.  Keep in mind only Office Professional Plus 2010 and Office Standard 2010 qualify for Volume Licensing.  Office Home 2010 and Office Professional 2010 do not qualify.
  • Forefront Protection 2010 For SharePoint Available May 2010. What is it?: Forefront Protection is added to the Volume Licensing Price List. Who's eligible?: All customers in standalone purchase, Forefront Protection Suite, and part of the Enterprise CAL suite. When's it effective?: The program begins May 2010.
    : Forefront has improved and new security partnerships keep users from uploading or downloading content that may contain security breaches, malware, out-of-policy content, to SharePoint libraries.  Users should do a quick cost comparison before moving this into the Enterprise CAL suite as standalone purchases in some cases may prove to be more flexible during the initial trial phase.

Microsoft Promotions Update
The following are new promotions that have been introduced as of May 1, 2010:

  • Enterprise Desktop and Professional Desktop. What is it?: Savings on Microsoft Enterprise Desktop, Professional Desktop, Enterprise Desktop with Microsoft Desktop Optimization Pack (MDOP) and Professional Desktop with MDOP.  Who's eligible?: Commercial and Government customers who qualify as Microsoft Open Value Level C (OV Level C) customers.  When's it effective?: This program starts May 1st, 2010 and expires June 30th, 2010.
    : To qualify as an OV Level C customer, customers must have an Enterprise agreement for more than 250 desktops PC's governed by a company wide agreement.   Customers who meet the qualifications for OV Level C typically receive an initial purchase discount up to 15% discount.   However, customers must purchase from a value added reseller (VAR).  Interested customers should hurry as the general OV Level C program originally expired April 3rd, 2010 but has been extended to June 30th, 2010.

The following are promotions ending on June 30th, 2010:

  • Open Value Subscription Expanded Up to DateWhat is it?: Upgrade to Microsoft Office 2010 or Windows 7 for customers who sign a new Open Value Subscription or Open Value Subscription for Government agreement.  Who’s eligible?: The Open Value Subscription program up-to-date promotion for existing desktop platform licenses of current (N) and previous (N-1) versions has been expanded to include N-2 versions: Microsoft Office Professional XP, Microsoft Office Small Business XP, and Microsoft Office Standard XP. When’s it effective?: Available now – the licenses launched worldwide in January 2010.
    POV: If there’s a compelling need to move to Office 2010 and Windows 7 and an Open Value Subscription is on the table, this represents a good incentive to upgrade to Microsoft Office 2010.
  • Rental Rights. What is it?: Rights for organizations to rent, lease, or outsource PC’s to third parties with qualifying Windows operating system or Microsoft Office system software.  Who’s eligible?: Open License, Select License, and Select Plus customers.   When’s it effective?: The program is effective from now till June 30th, 2010.
    : Based on current license rights, office equipment leasing companies, PC leasing companies and other businesses which provide PCs to operators of hotel and airport kiosks, internet cafés, and business centers, can not rent, lease or outsource the Microsoft software on the PCs to end users.  Microsoft began a program in January 2010 to offer these rental, leasing, and outsourcing rights for these businesses.  The program modifies the licensing rights for this type of third party end user situation.  The rights are provided through a one-time license transaction.  The rights are non-transferable and endure for the term of the underlying software license or life of the hardware they are attached to.
  • Windows HPC Server 2008 Promotion. What is it?: Customers who purchase Windows Server HPC Edition operation system server license and Software Assurance (SA) packs can save up to 25%.  Who’s eligible?: customers must be on Open License, Open Value, Select License, Select Plus, and Enterprise Agreements.  When’s it effective?: April 1, 2010 to June 30, 2010.
    Microsoft’s been beefing up its maintenance programs.  Today’s SA packs include more than upgrade rights.  Services range from cold back ups for disaster recovery, home use programs, E-learning, new version rights, to spread payments.   Microsoft does not require SA with purchase.  Customers who seek maintenance should assess their business requirements first and then determine what features and packs within SA to select.  Make sure you only buy maintenance for what you need.
  • Open Value Level C 15% Discount. What is it?: A 15% discount for an initial Enterprise product order.  Who’s eligible?: Customers who have an Enterprise agreement for more than 250 desktops PC's governed by a company wide agreement   When’s it effective?: The program is effective from now till June 30th, 2010.
    : Interested customers should hurry as the general OV Level C program originally expired April 3rd, 2010 but has been extended to June 30th, 2010.  Customers must purchase from a value added reseller (VAR).
  • Simplify And Save: Discount For Renewal Into Open Value. What is it?:  Renewing customers can save up to 15% on Software Assurance for the entire duration of an Open Value agreement for all products (i.e. all three years).  Who’s eligible?:  Customers with SA renewable products on the Open Value price list qualify.  When’s it effective?: Until June 30, 2010.
    POV: Open Value agreements only make sense if a customer wants to commit to a 3-year time frame.  Benefits include anytime upgrades, a single agreement, and the availability to move to client access licenses (CAL) instead of choosing between Small Business or Desktop Professional platforms.

The Bottom Line For The Customer - Many Promotions Expire Due To June 30th Fiscal Year End

As with any other software vendor, year end brings an end to promotions and a frenetic rush to meet quarterly and yearly forecasts.  If there's any lesson learned from this past year, vendors continue to incentivize promotions to grow maintenance revenue.  Microsoft is no exception as most promotions seek to increase customer base penetration.  Customers should pay close attention to how often upgrades, service requests, and license usage match with overall maintenance contracts.  Asses whether value has been achieved between the overall apps strategy and actual contract usage.  Keep an eye on reducing shelf ware and overall maintenance costs per employee.  And most of all focus on the ratio of business impact and cost of delivering IT services.
Your POV
What do you think of Microsoft's recent promotions?  Are you challenged trying to manage your Microsoft Licenses? Do you find the licensing too simple or too complex?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.
Please let us know if you need help with your Microsoft and overall apps strategy and contract negotiations strategy.  Here’s how we can help:

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