If you are not familiar with Microsoft Licensing then this can be quite confusing. There are a number of options available, but how do you work out what the best option is for your business.
This can be narrowed down by asking some simple questions to work out which is the better fit for you.
- What is my current refresh policy for server hardware and software?
- Are they the same?
- Are there any applications in my environment that require a specific level of operating system?
- What is my current refresh policy for endpoint devices, hardware and software?
- Are they the same?
- How big is my environment? How difficult is this currently to track and manage?
- How do I budget for this, opex or capex?
- What is my current planning cycle, 2 or 6 years?
Answering most of these questions will help you narrow down from some of the offerings available from Microsoft today.
Let’s start with the easiest of these questions. How big and how difficult is this to manage your environment today? If your business is 5 or less users it should be fairly easy to manage and upgrade the Microsoft products within your environment. If your business has 20 to 150 user count than this becomes a little more complex. Do you have a comprehensive filing system where you keep your invoices attached to every piece of OEM Microsoft licensing you have i.e. Server Licenses, PC Operating System, Office Applications, Server Applications, CALS and so on?
This is what Microsoft will be asking for if they pick your business for a Microsoft Audit.
If you are looking for something easier to help manage all this for you, the best choice is one of Volume Licensing product offerings from Microsoft. This allows you to track all your perpetual and subscription licenses online in the same licensing portal (VLSC). The Microsoft Volume Licensing Centre provides you with a fast and accurate at a glance overlook of what licensing entitlements you have for your business. Within this portal you also have the ability to download any media specific for your licenses. This is particularly handy if you are taking advantage of a downgrade entitlement for a specific OS or application, unlike with the OEM Licenses, where you would need to provide your own copy of the version you want to downgrade to.
Next we look at the refresh rate policy for both hardware and software? Most companies traditionally refresh this at the same time. This is not a problem before we virtualised our entire server environment. Nowadays, technology is advancing at such a fast rate. This provides you with some realistic business benefits that can be gained with superior processing power, lower power consumption, lower rack space footprint and therefore less power and cooling. Depending on the growth of your business this should be considered for an optimal cycle of 3-4 years.
As OEM Licenses live and die on the same piece of hardware it was purchased on, we need to ask. Do we have to rebuy the same software every time the hardware is replaced? Absolutely not.
There are still many examples in the market at the moment, where it makes more business sense to save money upfront with the licensing costs and only refresh this with the next hardware purchase in 5 years’ time. This approach is fine if your business does not depend on the IT Department to support an ever evolving efficiency machine providing a platform to the business that develops and enables new and dynamic ways to service both internal users and customers.
Looking at Microsoft Volume Licensing with Software Assurance benefits needs to be a long term business strategy. If your strategy is to upgrade to new Server/PC OS, Server and Endpoint applications every couple of years to take advantage of new software features that enable efficiency, you will literally save thousands of dollars. It may seem a little more expensive at the beginning, but comparing this to the cost of new licenses every 2-3 years you quickly begin to see how this cost saving can be significant. Best of all, under the Volume Licensing structure, your licenses are no longer tied to your hardware. This puts the power back in your control to upgrade either the licenses or hardware independently.
The next question to be assessed is the Capex or Opex model.
For capex you have some options. You can consider Open Business with SA for a 2 year agreement and this is payable upfront for the 2 year term with the Software Assurance (SA) Component becoming renewable after this point and only a fraction of the of the original license cost.
You also have an Open Value agreement that has a term of 3 years. This can be done as a 3 years Upfront payment or an annual payment for 3 years. Software Assurance is automatically included in this offering from Microsoft and is also renewable at the end of the 3 year term for a fraction of the original purchase price. Both the Open Value and Open Business model provide you with perpetual licenses.
If your preference is the Opex model, you can also choose the Open Value Annual payments agreement. This provides you with easy to manage cost for a 3 year period.
If your preference is to not own the licenses at all, you can consider the Open Value Subscription agreements from Microsoft. This works like the Open Value agreement, but is only payable annually for on a 3 year agreement. Some key considerations need to be made with this offering. You are paying for the rights to use these licenses and do not own them. You do have the flexibility to adjust up or down the number of licenses you are using and paying for at the time of the anniversary payment, as long as you keep the minimum number of licenses required for an active agreement.
At the end of this initial 3 year agreement, you have some additional options.
1. Buy out the licenses, this generally equates to a 1 year cost.
2. Not renew the agreement. This means you would need to uninstall all of the licenses moving forward.
3. Renew with another 3 year agreement. As the licenses were not perpetual your year 3 to 6 would be based at the same pricing as the structure as the initial 3 year agreement.
The above agreements and offerings are suitable for any business from 5-250 seats. Microsoft also has specific pricing structures for Corporate, Charity, Academic and Government.
If you would like some additional assistance or need some further clarification on any of the above mentioned agreements or offering from Microsoft, please speak to your friendly Account Manager today.