Cut through Microsoft licensing complexity

Practical IT Research that Drives Measurable Results

1Info-Tech Research Group

Cut Through Microsoft Licensing Complexity toNegotiate a Better Deal

With millions spent on Microsoft software annually, most companies are overspending on licenses

Info-Tech Research Group 2

Microsoft has multiple licensing options to provide flexibility for various sizes of organizations, commitment levels, and product usage. This adds greatly to the complexity, causing many companies to buy into the wrong

program.

This research is designed for: Executives and line-of-business managers responsible for

negotiating and managing software licenses. Software asset managers needing to familiarize themselves with

Microsoft licensing.

This research will provide you with the tools you need to:

Create a technology roadmap. Build a business case to keep or discontinue Software

Assurance. Make an informed decision about license acquisition options. Be well prepared for your license negotiation. Know that you are spending appropriately for your needs. Choose a Microsoft reseller and negotiate the deal.

Executive Summary


• Proper preparation including a technical roadmap, vendor research and license program comparisons are the highest contributing factors to the success of a Microsoft negotiation.

• Assignment of a dedicated license administrator is key to continued success.

• Successfully negotiating Microsoft licensing programs requires a balance of knowledge of product usage, product use rights, Software Assurance and license agreements, which is often provided by resellers on an ask-only basis.

• Value Added (VAR) and Large Account Resellers (LAR) do not always tell you what you need to know to negotiate a better license agreement and might just respond with, “Sorry, this is the best I can do,” when you are looking for areas of savings.

• Price is not the only area where you can save money – it really comes down to buying the right products in the right program.

Less than half of surveyed companies purchasing Microsoft software spend significant efforts to prepare for software negotiations. With Microsoft

comprising more than 50% of a company’s software budget, this could be leaving considerable money on the table.

Prepare the essential information to place yourself in the driver’s seat when negotiating a licensing deal

• The efforts required to prepare for your Microsoft purchase should increase proportionally with the size and complexity of your requirements.

• A formalized process will ensure information is readily available to negotiate contracts, but may prove to be excessive if purchasing a few licenses through a non-contract program.

• In either case, documenting the thought process and cost justifications for your decision will greatly help when renewing agreements and planning your next purchases.


Non-contract

Contract

Tasks that will contribute to your license negotiation success

Roadmap including Anticipated Growth Rate

Product Use Rights

License Program(s) Decision

ROI Calculator for Software Assurance Benefits

Acquire and read contract

Choose vendor and negotiate your deal

1

Calculate the value of

Software Assurance

to your company

Analyze product

licenses to find the

most cost effective solution

Negotiate and

manage your

agreement

Create technology roadmap

Decide which license

program will suit

your needs

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Next Section in Brief

• Create a roadmap to develop a clear understanding of how your technology requirements align with Microsoft’s upgrade paths.

• View technical requirements holistically to recognize, and plan for product dependencies.

• Understand how to license, to optimize software spend.

3

The MS licensing strategy success was calculated by taking the average of the satisfaction with the following items:

Microsoft eLicense site & sales support MS S/WA benefits use and adoption Vendor knowledge & support Ease of license management Ease of budgeting Comfort level with software spend

Organizations that spend more effort creating a technology roadmap achieve greater MS licensing

strategy success

Microsoft licensing success is most readily achieved by first creating a technology roadmap

The technology roadmap:• Documents previous upgrade paths for analysis of past behaviors• Identifies critical technologies and gaps and helps to align with business strategy• Identifies interdependencies of products (see appendix for partial list)

Use the roadmap to:• Compare Microsoft’s technology path with yours to see what software releases will benefit your organization• Extend the use of the technology roadmap to aid in budget planning, resource planning and education mappingInfo-Tech Research Group 6

Use the technology roadmap to provide the base for all discussions around Microsoft licensing

7

Review your technology requirements:

• What tools are currently in place and are they providing a poor, adequate or strong solution?

• What problems need to be solved?

• Can existing tools be upgraded, enhanced or reused to resolve issues?

• Can the problems be resolved by adding onto current infrastructure, or is it time to analyze alternatives?

• What is the cost of managing your current environment, will tighter integration of products help, or create greater expenses?

• Should the current infrastructure remain in-house or be partially or fully hosted?

These are all questions that must be answered while creating the roadmap and preparing for Microsoft negotiations.

Info-Tech Research Group

Complete Info-Tech’s Roadmap tool to compare your upgrade plans to Microsoft’s roadmap

• Review strategy and appropriate technology alternatives to satisfy critical planning and budgetary needs


If you prepare properly, know the roadmap and your strategic plan, you should be able to manage these expectations easily so you never overspend, especially holding an SA when it is of no value! ~ Director, Travel Industry

“”

The Info-Tech Microsoft Technology Roadmap tool will help you:

1. Document and analyze past and future upgrade paths.

2. Understand which products should be included in your Microsoft agreement.

3. Provide a starting point for training and deployment planning.

http://www.infotech.com/research/it-microsoft-technology-roadmap

Calculate the Value of

Software Assurance

to your company

Create technology Roadmap

Negotiate and

manage your

agreement

Analyze product




program will suit

your needs

1 2 541


• Expand on the roadmap by using the Product Use Rights to correctly license products.

• Know which licenses will save money on virtualization and productivity tools.

• Compare product license options to find the right solution.

3

Consult the Microsoft Product Use Rights to align product usage with licensing rights & obligations

• Expand the roadmap data to include correct product licensing based on Microsoft’s “Product Use Rights (PUR)” guide.

• Responsibility for reading, understanding and installing according to the Microsoft PUR belongs to your Software Asset Management Team and CIO.

• Use the PUR to plan and budget for upgrades or implementation of new technology, ensuring licensing rules are accurately reflected in your plan.

• Beware of changes to product use rights. Often changes are made when new versions are released or to accommodate technology changes, such as adding VDI to Windows Software Assurance (July 1, 2010).


Use Microsoft’s “Build a Customized Product Use Rights Document” to customize a PUR

Anti-piracy organizations, such as BSA or SIIA, fine companies as much as 3 times the retail price times the number of unlicensed installations when they determine a company is out of compliance. Additional criminal charges and copyright suits may follow in certain circumstances.

Info-Tech Insight:

http://www.microsoft.com/licensing/about-licensing/product-licensing.aspx

http://www.microsoft.com/licensing/PUR/products.aspx

Applications: Decide which products will be upgraded and deployed, and plan for alignment with Product Use Rights

• Extend use of applications such as Microsoft Office 2010 to the Web and handheld devices.

• Use roaming use rights, now available through Software Assurance, to make virtualization of applications less costly and more flexible.

• Ensure appropriate edition is deployed to spend only what is needed, for example; Project Professional used where Standard would be appropriate would be an unnecessary expense. Use our survey questions for Visio and Project to choose the right edition for the job.


If considering options of whether or not to upgrade to Office 2010, see Info-Tech’s Storyboards: Make the Decision to Upgrade to Microsoft Office 2010 and Investigate Alternative Office Suites

Info-Tech Research Article:

PUR Licensing Basics:• Office 2010 suites and

individual applications are licensed per device and can be downgraded (exception: OEM & FPP).

• Portable Device rights extended to primary user on a second computer.

• Work At Home (WAH) rights apply to primary user of software.

• Exceptions apply to mapping and development software.

http://www.infotech.com/research/storyboard-make-the-decision-to-upgrade-to-microsoft-office-2010

http://www.infotech.com/research/storyboard-investigate-alternative-office-suites

An engineering firm overspent by 40% on Project & Visio licenses by not matching product use to the right edition


A customized Info-Tech survey was completed with results showing the majority of users needing the capabilities of Standard editions with a small group requiring Professional. Savings of $142,212 could have been achieved by better understanding product usage requirements.

When upgrading to 2010 versions, they will use the survey data to prevent a second overspend.

Product Unit Price

Original Qty

Original Ext. Price

New Qty

New Ext. Price

Project Standard $533 240 $127,920

Project Professional $889 260 $231,140 20 $17,780

Visio Standard $207 228 $47,196

Visio Professional $456 260 $118,560 32 $14,592

Total Spend $349,700

$207,488

(survey questions for v.2010 are listed in the appendix)

In an attempt to find money on the software budget before the next upgrade, an engineering company surveyed 260 project managers deployed in the field, all licensed without Software Assurance for Project Professional and Visio Professional through the Select (level A) program.

Desktop Operating System: Buy the best option of Windows O/S to match your IT Team’s upgrade strategy

• Upgrade to Windows Professional 7 for faster processing, choice of 32-bit or 64-bit and new user interface.

• Purchase Windows 7 Ultimate as a retail upgrade or OEM install if planning to use Bitlocker and Bitlocker-to-go for hard drive encryption.

• Add Microsoft Desktop Optimization Pack (MDOP) to Software Assurance for deployment, management and asset management tools (see appendix for more information on MDOP).


For additional information on Windows options and desktop encryption, see Info-Tech’s Storyboards Plan, Select and Deploy Windows 7 the Right Way, Mobile Policy: security from a data perspective , and Essential Strategies for Laptop Encryption.


~continued on next slide~

PUR Licensing Basics:• Windows base license is

available as retail (FPP) or OEM.

• OEM Windows is included on all tier 1 computers.

• Upgrades from Windows XP Pro or Vista are best purchased through licensing programs.

• Licenses can be downgraded to Windows Vista or XP Pro if needed.

• Licenses (not FPP or OEM) permit use of reimaging software for image distribution.

http://www.infotech.com/research/ss/plan-select-and-deploy-windows-7-the-right-way

http://www.infotech.com/research/ss/plan-select-and-deploy-windows-7-the-right-way

http://www.infotech.com/research/mobile-policy-security-from-a-data-perspective

http://www.infotech.com/research/mobile-policy-security-from-a-data-perspective

http://www.infotech.com/research/essential-strategies-for-laptop-encryption-projects

Add Software Assurance to upgrade Windows Pro 7 to Enterprise 7 to gain search, security, and virtualization

features


DirectAccess Provides secure network access to mobile users without VPN, remote access for IT support and authentication.

BranchCache: Provides secure, permission-based, local caching of intranet sites and files on either PCs or local servers for faster access at branch locations.

Federated Search Advanced desktop search technology, using OpenSearch, and ability for administrators to populate links on the start menu.

BitLocker and BitLocker to go*

Data protection on mobile devices as well as USB storage devices using encryption and password protection.

AppLocker Rule-based structure to prevent unauthorized apps from being installed, while still allowing flexibility for scripts and updates to install on approved applications.

Multilingual user interface

Create a single image for worldwide deployment.

Virtual Desktop Infrastructure (VDI)

Access virtual desktops on PCs or remotely access virtual desktops from third-party devices.

* Also available in Windows Ultimate through OEM

Servers: Save 18-50% by carefully configuring server licenses during virtualization and implementation

• Reassess server licenses during virtualization to reduce total server costs, for example 8 Windows Standard Servers will cost $10,104 where a DataCenter license with 8 instances will only cost $4,182.

• Carefully assess the value of Enterprise add-on CALs, such as Exchange Enterprise; does the extra price justify the extra features? Will the features save money by replacing other tools or cost extra when a lower priced alternative would do?

• Reassess products with per Processor or Server/CAL license options to find significant cost savings as noted in the next two case studies.


Server specific research can be found at Exchange 2010 Upgrade, What’s new in Exchange 2010, Infrastructure Impact of Exchange 2010, SharePoint for ECM, Dynamics CRM, Windows 2008, Server Virtualization


PUR Licensing Basics:• Server or Processor licenses are

required for each physical & virtual installations

• Web Servers, External Connectors and Processor licenses do not require Client Access Licenses (CALs)

• Server licenses require either User or Device CALs, which must match or be higher than the server version• User CALs are most cost

effective for users with multiple devices

• Device CALs are most cost effective for devices with multiple users

• Some products have role-based CALs such as SCCM or Dynamics CRM or add-on CALs providing additional functionality such as Exchange Enterprise CALs

*US Enterprise level-A 3 year pricing

http://www.infotech.com/research/storyboard-make-the-decision-to-upgrade-to-ms-exchange-2010

http://www.infotech.com/research/whats-new-in-exchange-2010

http://www.infotech.com/research/infrastructure-impact-of-exchange-2010

http://www.infotech.com/research/ss/evaluate-sharepoint-for-enterprise-content-management

http://www.infotech.com/research/customer-relationship-management--microsoft-dynamics-crm-v4

http://www.infotech.com/research/why-windows-server-2008-users-speak-out

http://www.infotech.com/research/ss/select-the-right-vendor-for-server-virtualization

32% savings on SQL licenses for this manufacturing company were easily found through a license assessment

The existing license configurations were analyzed to determine the most cost effective method of licensing SQL moving forward. The Server/CAL configuration was $94,828 less expensive than the Processor configuration.


A manufacturing company was running SQL on several servers and had plans to consolidate and upgrade servers and extend the SQL based applications out to a larger audience of users. As the licenses were not consistently covered under Software Assurance, new licenses were required for most of the servers.

Processor ConfigurationSQL Enterprise x 4 @ $22,856SQL Standard x 38 @ $5,347

Total $294,610

Server / CAL ConfigurationSQL Enterprise Server x 2 @ $8,007SQL Standard Server x 38 @ $836

SQL CALs x 1000 @ $152Total $199,782

*Select Level A Pricing

Analysis of SQL licenses for this healthcare organization showed savings of 46%

An assessment compared the Server/CAL and Processor licensing models. The Server/CAL configuration was $197,792 more expensive than the Processor configuration.


A healthcare facility was looking to license SQL Servers and CALs under a new Select Agreement to replace their Subscription agreement. Their Large Account Reseller provided a quote to license all users with CALs and all servers with server licenses. Their servers were all dual processor.

Server / CAL ConfigurationSQL Standard Server x 32 @ $557

SQL CALs x 4000 @ $102Total $425,824

Processor ConfigurationSQL Standard x 64 @ $3,563

Total $228,032

*Select Canadian (Proposed) Healthcare Pricing


program will suit

your needs

Analyze product



Negotiate and

manage your

agreement


Software Assurance

to your company


1 3 54


• Learn the benefits of Software Assurance.

• Calculate the value of Software Assurance to your organization.

2

Consult your roadmap to see whether Software Assurance benefits will help you reach your technology goals


Software Assurance benefits vary for each product pool and licensing program. Benefits will increase with larger quantities and stronger commitments to Microsoft platforms for example: Office & Windows vs. Office only. Application

s PoolDesktop

Operating System Pool

Server Pool

Upgrades

Step Up Upgrades Win Enterprise

eLearning

Training

Home Use Program

Packaged Services

Employee Purchase Program

24 x 7 Problem Resolution Support

Technet Subscription Services

Extended Hotfix Support (with premier support package)

Roaming Use Rights

Multi-language Packs

Virtualization

Determine what you are getting or giving up in meeting your goals with Software Assurance before signing your

agreement• Receive more support from with Microsoft Software Assurance through

training, technical support, deployment planning and account management over agreements that include license only.

• Plan ahead for features and enhancements available through Software Assurance that will enable your IT Team to reach their technology goals, for example, our survey respondents noted a significant change of importance of desktop virtualization before and after signing their agreement.

20

Time of Signing AgreementN =

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N = 140

The MS licensing strategy success was calculated by taking the average of the following items:Microsoft eLicense site & sales supportMS SA benefits use and adoptionVendor knowledge & support

Ease of license managementEase of budgetingComfort level with software spendInfo-Tech Research Group

Map Software Assurance benefits to your technology roadmap to build your business case for or against SA

• The main deciding factor in choosing the appropriate program is to determine if Software Assurance is right for your company.

• Two obvious benefits are access to upgrades and management simplification. However, these need to be weighed with other benefits and against the final cost.


The Info-Tech ROI Calculator for Software Assurance Benefits will help you:1.Review benefits and analyze how they

will be used within your organization.

2.Understand which benefits can be traded up to increase value even more.

3.Quantify benefits to build your business case for or against Software Assurance. Enter user counts and

anticipated usage and let the tool

do the rest

http://www.infotech.com/research/roi-calculator-for-microsoft-software-assurance-benefits




Software Assurance

to your company

Analyze product



Negotiate and

manage your

agreement


program will suit your

needs


1 4 54


Learn the options for:

• License without Software Assurance.

• License with Software Assurance.

• Alternatives and additions to traditional license programs.

3

Know your license & Software Assurance needs tochoose your Microsoft purchasing program


Price is certainly a major concern, but understanding of the license models is essential to get best for the best price. ~ Manufacturing Manager

“ ”

Start

Avoid OEM & Retail purchases to circumvent complications with asset management & mass

deployment


Original Equipment Manufacturer (OEM) and Full Packaged Product (Retail) licenses do not appear on Microsoft reports and will require manual license tracking. In addition, multiple serial numbers will need to be managed and

products cannot be installed using mass deployment tools.

OEM FPP Licensing

Windows Desktop Operating System is mandatory on most machines and is the only OEM you should buy

Different versions of software than what is offered through licensing, for example Office Professional includes less modules as a retail package than the Pro Plus version available through licensing

Flexibility of multiple license types, back versioning and software assurance

Single price level, high Single price level, highest Multiple discount options

Single install, no virtualization rights

Single install, no virtualization rights

Portable Use Rights, Roaming and Virtualization capabilities

Single use serial number Single use serial number Multiple installs with single serial number

Install is tied directly to the machine and cannot be transferred to another

Install can be transferred to a new machine, but may need to contact Microsoft for new serial number

elicense, media download, transfer rights to new machine or alternate company (restrictions apply)


Receive volume discounts for license without Software Assurance based on the size of your purchase

There is no magic to the discounts in license-only programs. The more you buy, the lower the unit price. SA benefits through these programs are minimal, so do not use if buying SA.

5-249 UsersOpen Business

250-749 UsersOpen License C

750+ Select Plus

Minimum Buy-in 5 licenses 500 points* 500 points* per year for 3 years

Agreement term & type

2 yearsTransactional


No expiryContract

New Licenses Purchased when installed

Purchased when installed


Source Any Microsoft resellers

Any Microsoft resellers

Large Account Resellers

Standard Discounts

Lowest volume discount

Medium volume discount

Highest volume discount

Extra Discounts Tiered discounting for higher quantities

*See appendix for more detail on points & programs

GoodBette

rBest

A manufacturing company saves money by purchasing license only and rejecting Software Assurance


Environment:

• A small manufacturing company is replacing 100 desktops over next three years with no plans for virtualization.

• Uses a heterogeneous server environment with plans to upgrade server software during the virtualization project which includes replacement of hardware.

• Uses a combination of Office Standard and Professional Plus for most users and other desktop applications sporadically, as standalone installations with minimal file sharing.

Recommended Plan of Action:

• Purchase Windows Professional 7 OEM on the new machines.

• Purchase new server licenses as either Enterprise or DataCenter versions to allow installation of one physical and four or more virtual copies on each machine through Open Business program.

• Purchase Office and other applications through Open Business.


Not all License with Software Assurance programs are offered by all vendors; choose the one that’s right for you,

not them!The more you buy, the lower the unit price. Additional discounts apply to the Open programs for licensing all eligible computers “Company Wide” and buying from more than one product “Platform”, for example Office and Windows, but you often have to ask for them!

5-249 UsersOpen Volume

250-749 UsersOpen Volume C

250+Enterprise

Minimum Buy-in 5 licenses 250 licenses 250 licenses

Agreement term & type



3 yearsContract

New Licenses Purchased when installed


Purchased in annual true-up

Source Any Microsoft resellers

Value Added Resellers


Standard Discounts

Better than Open Business

Better than Open Volume

Best Discounting

Extra Discounts Company Wide & Platform

Company Wide & Platform

Tiered discounting for higher quantities

*See appendix for more detail

GoodBette

rBest

A transportation company reaps great rewards by purchasing licenses with Software Assurance


Environment:• A transportation company with 185 users is ready to renew their

software assurance through their Open License program.

• They are currently running Windows 2003 and Exchange 2003 servers and CALs, Office 2007 and Windows XP.

• Over the next two years they plan to implement Unified Communications, Forefront security and SharePoint as well as upgrade users to Office 2010 and Windows 7.

• Their education plan includes eLearning for users on the new desktop software as well as classroom training for the technical team on the new versions of server software.

• Their growth plan during the next 24 months will increase the user count to 350 users.

Recommended Plan of Action:

• After completing a Software Assurance benefits analysis, the customer determines that SA will be of value to their organization.

• Although they do not have the 250 user minimum, they are willing to buy 250 as they will reach that number within less than a year.

• They will sign an Enterprise agreement with a single desktop price including Enterprise CALs, Office Professional and Windows 7 Enterprise.

• Their estimated spend is $145,000 with value of licenses and other benefits over $200,000.


Gain flexibility with license programs by adding alternative programs for hosting or temporary use

licensesUse these license agreements alone or in combination with Open or Enterprise agreements to add flexibility to your licensing portfolio.

Subscription BPOS APA

Minimum Buy-in 5 licenses (Open)250 licenses (Enterprise)

250 licenses 250 licenses

Installation In-house Microsoft hosted Microsoft hosted

Agreement term 3 years, extend to 6

1 year, or matched to agreement if more than one are in place

3 years, extend to 6

New Licenses Annual true-up or true-down

Monthly usage True-up at end of agreement term

Source Any reseller (Open)Large Account Reseller (Enterprise)

BPOS authorized Resellers


Standard Discounts

Approx. 20% less than license and SA price

Price set at beginning of contract

Extra Discounts Tiered discounting based on quantity …more information on each program to

follow

*See appendix for more detail


Microsoft’s Subscription model is optimal in very few scenarios and may increase costs in the long term

The owner of a mid-sized company is planning for retirement and his succession plan is to sell the company within three years. The business is cyclical with employee count fluctuating throughout the year. The subscription allows them to resolve compliance issues, stay current , see an annual increase or decrease in license usage and save money over an enterprise agreement.

Product Enterprise Subscription

Qty Unit $ Ext. $ Qty Unit $

Ext. $

Office Pro Plus 250 $228 $57,000 250 $163 $40,750

Core CAL 250 $84 $21,000 250 $55 $13,750

Windows Enterprise 250 $66 $16,500 250 $70 $17,500

Totals per year $94,500 $72,000

*pricing based on US Open Value Subscription / More information on Subscription can be found in the appendix

However, if circumstances changed and it was desirable to stabilize the asset inventory and stop paying for Software Assurance benefits, the costs to buy-out licenses would immediately out-weigh the short term savings. A better alternative might be Microsoft’s SaaS solution: Office 365.

Employ Microsoft’s Office 365 Suite to reduce overhead & maintenance, and increase speed to market

• Employ Microsoft server applications on-line to outsource patch management, maintenance, multi-layered security, and storage.

• Gain savings over hardware, storage and energy use with predictable, monthly fees based on actual product usage.

• Employ new features and functionality immediately upon their release, with updates released every 1-2 months (see appendix for roadmap).

• Provision for unexpected or planned traffic bursts by quickly scaling up virtual servers; for example, a pizza company uses the Azure platform to handle extra business on Super Bowl weekend.

• Use Office 365 for fast deployment of mobile or remote workforce or to accommodate fast growth.

• Combine Office 365 with existing license programs or purchase through a user subscription license.

• Shift accounting practices from capital to operating expenses.

31

Microsoft’s server farms are located in the United States and are therefore covered by the US Patriot Act. There may be instances where this will create privacy concerns for non-US organizations.

Info-Tech Insight:


Take advantage of the flexibility to Microsoft Office 365 to replace or enhance your existing infrastructure

• Replace some or all on-premise infrastructure, redirecting resources to work on line of business processes rather than maintaining basic infrastructure; for example, the communications infrastructure consisting of Exchange, Office Communicator, Live Meeting and BlackBerry portal can all be hosted with administration consisting only of add, remove and changing of users.

• Enhance existing infrastructure by separating business units or geographic locations into on-premise and hosted applications; for example, a corporate office may use on-premise servers for all infrastructure with hosted solutions for retail locations or satellite offices.

• Watch for InTune, a Microsoft solution providing cloud-based management and security capabilities for Windows 7, currently in Beta.

32

Are the cloud products as robust as internally hosted applications?

It varies by product based on maturity of the online solution:

• Exchange online is close to parity.

• SharePoint online currently has less functionality.

• Live Meeting has more functionality in the cloud.

• Office 2010 includes slightly different capabilities between the rich client, Web client and mobile device, but doesn’t change the integrity of the document when all 3 are used.

~ as of September 2010Info-Tech Research Group

Enroll in Microsoft’s Application Platform Agreement (APA) to gain unlimited server deployment rights for 3 years

• Use the APA to gain predictable costs for applications which may include portal, service orchestration, business intelligence and management and the data platform.

• Develop these applications on a standardized platform using an integrated group of core server technologies and development tools.

• Negotiate pricing at the beginning of the 3 year contract term based on the deployment schedule making fixed annual payments; extend to as many as 6 years if appropriate.

• True-up at the end of the agreement, or choose to true-up annually.

• Combined APA with your Enterprise or Enterprise Subscription Agreement.


APA includes the following products:

• MS SQL Server & SQL Parallel Data Warehouse & Center

• MS BizTalk Server

• MS Office SharePoint Server

• MS Visual Studio Team System

• MS Expression Studio

• MS Office PerformancePoint Server business intelligence software

• FastSearch for SharePoint

• MS System Center Server Management Suite Enterprise

• 24x7 unlimited support with $250,000 spendBeware: easy deployment options come with great deployment responsibilities !

Be sure to budget for the true-up at the end of the contract term.

Info-Tech Insight:

Enroll in Microsoft’s Core Infrastructure (ECI) to cost effectively gain virtualization, security and management

in one suite

• Use ECI to simplify licensing for core infrastructure server products based on Microsoft’s Core Infrastructure Optimization Model to provide end to end solution to manage from the desktop to the datacenter.

• Combine with Enterprise Agreement to purchase required Core CALs.

• Save 13-29% by purchasing products bundled, with the cost at 5-15% more than the price of just the windows servers.

• License physical and virtual systems on a per processor basis.


ECI includes the following products:

• MS Windows Server (1 of 3 options)

• Standard (1 virtualized server)

• Enterprise (4 virtualized servers)

• DataCenter (unlimited virtualized servers)

• MS Forefront Clients

• MS System Center

This program starts with a 50 processor minimum and licenses products through one of 3 suites and is therefore geared to a larger infrastructure.

Info-Tech Insight:

Consider these points when migrating to a new licensing program


If multiple agreements exist and need to be consolidated into a single contract:

• Start negotiations 60 to 90 days prior to the first expiry date as there is no grace period, and missing the expiry could lose your Software Assurance investments.

• Microsoft will provide credit for Software Assurance contracts with future expiry dates.

If moving from a transactional program to a contract program:

• Be well prepared for your negotiations as you are in a position of power.• Inventory licenses and installations to ensure adequate licenses are negotiated into

contract.• Know your compliance status to counteract any threats of compliance action.

If moving from a contract program to a transactional program or are dropping Software Assurance:

• Do a final true-up to be compliant and prepare for an audit.• Purchase additional licenses in final true-up to accommodate any new licenses needed

over next 6 – 12 months to take advantage of discounts.

If moving from subscription to perpetual contract program:

• Start negotiations 90 days or more prior to expiry date – if contract ends before negotiation is complete, you will be in a non-compliant situation with your licenses.

If combining different types of agreements, such as Enterprise and Office 365 or Microsoft Partner Program:

• Negotiate the agreement simultaneously as this is the time when you will have the greatest leverage.

• Define your enterprise to exclude licenses covered under other programs.


Software Assurance

to your company

Analyze product




program will suit

your needs

Negotiate and manage

your agreement


1 543


• Choose your vendor

• Negotiate your agreement

• Manage your agreement

2


Choose a vendor who will support yoursoftware asset management efforts

A complex, formal RFQ may not be appropriate for Microsoft licensing. If buying through a transactional program or Select Plus, prices will vary between resellers, but if buying through the Enterprise agreement, Office 365 or APA prices are set by Microsoft. In that case, an RFI might be more appropriate. Here are some things you can look for in a Microsoft software vendor:


Do they offer training? Are they a Microsoft accredited training center? If so, do they have flexibility for on-site, Web-based or off-site training? (Is this important to you?)

What kind of support can this vendor provide that will supplement the support you receive from Microsoft?

Can you use your deployment planning credits (if signed into SA) with this vendor, and will they provide any enhancements to the planning process over other vendor offerings?

Does the vendor supply a hardware and software catalog online?

Does the vendor supply online reporting or software reports on demand? (Request a sample copy)

Does the vendor have software licensing experts on staff to answer questions?

Can those experts provide copies of contracts and end user agreements before you commit to signing?

What will the vendor do to help you with your asset management efforts?

Prepare to negotiate using the Software License Negotiation Summary template and strategy documents

checklist

Fill out the Info-Tech Software License Negotiation Summary template to create your company and software requirements profile and combine with the following:

Microsoft RoadmapProduct Use RightsROI Calculator for Software AssuranceLicense Program DecisionCopy of contract if applicable

Use this as a guide when negotiating your agreement and for documentation for your thought process when negotiating your future renewal.Info-Tech Research Group 38

If purchasing through a transactional program, you will have less negotiating room than with a contract program. This doesn’t mean you won’t have any options, especially if introducing new technologies. Talk to your Microsoft Account Manager about promotions and discounting.

http://www.infotech.com/research/it-software-license-negotiation-summary

Strategize with your team to complete your final preparations to lead the negotiations

• Collaborate with your IT Team, Purchasing and Legal teams to pull together your information prior to meeting Microsoft and create your negotiation strategy so you can be the lead in the negotiations.

• Complete the final true-up, if renewing an Enterprise Agreement, purchasing any last licenses needed to create a risk of non-renewal, allowing you the option to walk away if needed.

• Read the contract prior to meeting Microsoft.

• Investigate alternative technologies if it is appropriate, but only threaten to move away from Microsoft technology if it is a viable alternative; Microsoft has been hearing idle threats for years.

• Be prepared with alternative licensing options; lead with your ultimate plan, but have the ability to pull back if budget and terms & conditions cannot be met.


For additional negotiation strategy information, see IT Resource Management: Vendor Management Negotiate Contracts.


http://www.infotech.com/research/it-resource-management-vendor-management-negotiate-contracts

Define your enterprise & product requirements prior to meeting with Microsoft to speed discussions

• Define your enterprise, noting that “qualified computers” may exclude groups of computers such as line of business machines, computers covered under the Microsoft partner network agreements or development computers licensed with Visual Studio w/MSDN licenses , as they include Office licenses for production use

• Know your compliance status to defend against threats of a Microsoft audit; this will include software licensed through third-party vendors, such as Windows and SQL server licenses provided as OEM licenses with vendor solutions

• Note any desired product changes such as converting Device to User CALs or modification of server licenses to accommodate virtualization


For additional information on the Microsoft Partner Network see Understand the Microsoft Partner Network.


• Request special pricing to step up current licenses to suites, for example: licenses of Windows and Exchange CALs can be upgraded to Core CAL suite

http://www.infotech.com/research/ss/understand-the-microsoft-partner-network

Meet with the right people tonegotiate & close your agreement

• Negotiate prices for new licenses, Software Assurance and true-ups, terms & conditions, audit terms, payment structure and grace period for renewal.

• Perform a 6 year financial analysis to get a feel for future costs; and extend agreement to 6 years if it makes sense to do so to lock in prices.

• Consider a partial platform Enterprise agreement if the full platform is not appropriate.

• Know that Microsoft’s year end is June 30th, and if you are fortunate enough to be in the position of starting a new agreement around this time, Microsoft will be more generous in an attempt to close business before their year end.

• Understand that your Account Manager’s goal is to grow the new agreement 15-20% over your previous one.

• Negotiate directly with Microsoft, rather than through your reseller if you want to get the best price and terms & conditions; and don’t be afraid to ask your Account Manager to involve an Executive to resolve negotiation points.

• Ensure the contract addendum lists all agreed upon negotiation points before signing, as anything agreed to verbally or by email will be voided by the contract.


Assign a dedicated administrator to achieve greater satisfaction with Microsoft licensing

• Assign a license and software administrator if one isn’t already in place who can manage the assets, monitor the agreement(s) and deploy Software Assurance benefits.

• Document strategy & success factors leading to current contract to assist in next renewal, especially if multiple agreements exist.

• Sign up for eLicense site and Software Assurance benefits for easier management.

• Roll out benefits with new software versions (i.e. eLearning, server technical training).

• Review software assets quarterly and redeploy licenses as appropriate

• Complete annual true-ups to keep compliant.


The MS licensing strategy success was calculated by taking the average of the following items:

Microsoft eLicense site & sales supportMS SA benefits use and adoptionVendor knowledge & supportEase of license managementEase of budgetingComfort level with software spend

Appendix


Applications Pool• Single Application (Project, Visio) = 1

point• Office Suite = 2 points• Office Rental Rights = 1 point• Software Assurance = 1 point/yearSystems Pool• Windows OS = 2 point• Software Assurance = 1 point/yearServer Pool• Client Access License = 1 point• Standard Servers = 10 points• Enterprise Servers = 50 points

A complete list can be found at: http://www.microsoftvolumelicensing.com/

Points Value:

Open Volume = 500 points per product pool minimum purchase, reorders of single licenses

Select Plus = 3 year forecast per product pool with 1/3 point purchase required each yearA = 1,500 pointsB = 12,000 pointsC = 30,000 pointsD = 75, 000 points

No expiry date on Select Plus, but minimum requirements of 500 points per year must be met otherwise the agreement will be suspended

Discount Tiers

Appendix: Microsoft Open Volume & Select Plus Details


Open Value = 250 desktops

Open Value C = 250 – 750 desktops Pricing is comparable to Enterprise Level

A. This program is most useful where a strong relationship exists with partner who is not a Microsoft LAR.

In most cases, companies at this level will purchase under Enterprise to gain higher Software Assurance Benefits.

Platform Option offers discounts if standardizing on all desktop licenses (Office, Windows, Core CAL Suite*).

Company Wide discount deepens discount by 15% (confirm).

Open Value:

Company wide program committing all eligible desktops to coverage of Office, Window and /or Core CAL Suite* Licenses and Software Assurance. The contract commits you to annual license true-ups.

This program offers the deepest discount available with additional discounting for larger volumes:A = 250 - 2,399 desktopsB = 2,400 – 5,999 desktopsC = 6,000 – 14,999 desktopsD = 15,000 + desktops

Also includes 20 free training copies of any products your company is licensed for and 10 evaluation copies for any Microsoft software.

Enterprise Agreement

Appendix: Microsoft Open Value & Enterprise Details

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*Core CAL = Client Access Licenses for Windows, Exchange, SharePoint and Systems Center Configuration Manager.


• Do you require Visio for diagramming Six Sigma, SharePoint workflow or Business Modeling Notation (BPMN) ? (Premium)

• Do you require Visio for diagramming software application design, pivots, engineering, ITIL , networks, Website mapping, HVAC, electrical, architectural or plumbing plans? (Professional)

• Do you require Visio for flowcharts, Brainstorming, mind maps, organizational charts, or project management diagrams? (Standard)

Visio 2010

• Do you create, view and update files exclusively on your workstation? (Standard 2010)

• Do you view, update and analyze project data located on the server, but do not create new projects? (Client Access License 2010)

• Do you require the ability to create, update and analyze project data as well as view resource availability, skills and project status on the server? (Project Professional 2010)

Note: CAL is less expensive than Standard and Professional is the most expensive. In order to use Professional and CALs on the server, Project Server 2010 must be installed and requires SharePoint 2010, SQL 2005 or later, Windows 2008 or later.

Project 2010

Appendix: Survey Questions for Visio & Project Use



Appendix: Microsoft Subscription Programs

Subscription requires an annual true-up or true-down, includes media downloads and access to the most current software versions.

Subscription:• Requires an annual true-up or true-down.• Includes media downloads and access to the most current software

versions.• Transitions existing licenses into subscription fees.• Offers additional discounts if existing licenses are current.• Is available in Open License (5-249 desktops) or Enterprise (250 +

desktops).• Tiered discounts are also available in Enterprise for larger

quantities.• Company-wide discount applies if all eligible machines are licensed

in Open Value Subscription.• Most Microsoft resellers can provide Open Value Subscription, but

only Large Account Resellers can provide Enterprise Subscription.

• Co-authoring feature allowing multiple users to edit a document at the same time

• PowerPoint synchronized slide shows using PowerPoint Broadcast Service

• PowerPivot to consolidate and publish large amounts of data from unrelated sources using Excel 2010 via SQL Server 2008 R2 Analysis Services

• Office Web Apps for users to access Office applications and documents through a browser

Office 2010 has new features which require use of a SharePoint 2010 server:

• Portfolio Management features such as resource capacity planner for managing multiple project resources, costs, benefits/risks and priority

• Project Web Access using JavaScript for reporting and collaboration

Project Enterprise (formerly Project Server plus Portfolio Management) requires SharePoint 2010 for:

Appendix: Interdependencies of Microsoft Products


Visio has sharing capabilities that use SharePoint 2010:

• Visio 2010 Premium (new) includes new templates and validation rules for workflows, Business Process Modeling Notation and Six Sigma Processes

• Visio services permits users to view diagrams using a web browser

Servers

Check requirements for all products using Microsoft’s “Licensing Briefs” to verify operating system and other requirements.

• SharePoint 2010 requires SQL 2005 or higher

• All server applications require Windows Servers

http://www.microsoft.com/licensing/about-licensing/volume-licensing-briefs.aspx

Appendix: Microsoft Windows MDOP

MDOP is available only as a benefit to Software Assurance and includes the following features:

Microsoft Application Virtualization (App-V) turns applications into on-demand, centrally managed services.Microsoft Enterprise Desktop Virtualization (MED-V) deployment and management of virtual PC images for applications requiring an older Windows version.Microsoft Asset Inventory Service (AIS) hosted software asset management service.Microsoft Diagnostics and Recovery Toolset (DaRT) tool for troubleshooting, repairing and recovering data on unbootable Windows based desktops.Microsoft System Center Desktop Error Monitoring (DEM) an agent-less tool which provides insights into failures on applications and operating systems, allowing helpdesks to manage PC problems.Advanced Group Policy Management governance and control tool providing change management, versioning and role-based administration.

Source: Microsoft Windows Enterprise


http://www.microsoft.com/windows/enterprise/products/mdop/app-v.aspx

http://www.microsoft.com/windows/enterprise/products/mdop/med-v.aspx

http://www.microsoft.com/windows/enterprise/products/mdop/ais.aspx

http://www.microsoft.com/windows/enterprise/products/mdop/dart.aspx



http://www.microsoft.com/windows/enterprise/products/mdop/dem.aspx

http://www.microsoft.com/windows/enterprise/products/mdop/agpm.aspx

http://www.microsoft.com/windows/enterprise/default.aspx

Appendix: Microsoft Business Productivity Online Suite Roadmap


2009 2010 201

1April 2009• Deskless Worker• 19 New Markets• OC Online • Blackberry Device

Support

June 2009• Increase mailbox

attachment size• Outlook 2003 w/o

Free Busy

July 2009• Hosted

Exchange migration tool

• Increase SharePoint upload size to 250MB

• Live Meeting Standard to 250 users

• Quick Trial• Partner order

on behalf

August 2009• SMTP Relay• Exchange

Journaling• New language in

MOAC

September 2009• Support 30K seats• Improve Mac

Support• Bulk Activation• POP Mail Client

June 2010• Hosted Blackberry

Administration Center• Office 2010 support• Enhance Powershell scripting• Enhance syndication partner

interface

Jan 2010• Outlook 2003 Connector• Exchange Online Usage Reporting• Expand Languages and Markets• CRM integration with Exchange Online• Delegate Administration• Multi-tenant Blackberry Device

SupportMarch 2010• 25GB mailbox storage per user

default• Extend SharePoint site

collection limit• Improved domain management• File attachments to service

requests• Support for Mac OS X Snow

Leopard• Enhance Live Meeting Usage

Reporting• Enhance Live Meeting

Recording Publication Process• Enhance service

communication via RSS

April 2010• Extend service in 17 additional

marketsData supplied through Microsoft BPOS High Level Roadmap

Q1 2011 (Preview Q4 2010)• Update with Exchange 2010

Server • Update with SharePoint 2010

Server Update with Communicator 2010 Server

• Office Web Apps • Free/Busy co-existence• Single Sign On with identity

federation• Redesigned User Interface• More administration and access

control

H2 2011• Communication Online

Conferencing• Communication Online Voice• New markets and languages• More to be announced

The MS licensing strategy success was calculated by taking the average of the following items:

Microsoft eLicense site & sales supportMS S/WA benefits use and adoptionVendor knowledge & supportEase of license managementEase of budgetingComfort level with software spend

The MS licensing strategy effort was calculated by taking the average of the following items:

Created technology roadmapCompared licensing programsCompleted cost/value analysisResearched Microsoft product use rightsExamined different licensing modelsIssued an RFP to find the lowest priceResearched vendors for licensing support

Appendix: Measure of success & effort as notedon license management slide

Appendix: Microsoft Reference Tools

Volume Licensing Briefs: Microsoft provides in-depth assessments of common questions around complex licensing solutions.

Microsoft Volume Licensing guides: Information on Software Assurance, Product Use Rights and Quote Builder.

Microsoft MDOP ROI Tool: calculate the return on investment for MDOP (login required).

Source: Microsoft Volume Licensing


http://www.microsoft.com/licensing/about-licensing/volume-licensing-briefs.aspx

http://www.microsoft.com/licensing/mla/select.aspx

https://roianalyst.alinean.com/microsoft/mdop/

http://www.microsoft.com/licensing/default.aspx

Appendix: Research Demographics


Info-Tech conducted a survey to generate the data needed to create this research. The following are graphs depicting the demographic

information of those who participated in the survey.

Appendix: Survey Questions

1. Does your company current have a dedicated person assigned to administer your licensing programs?

2. Do you currently have Microsoft Software Assurance in place?

3. The Microsoft Software Assurance program comes with many benefits. Describe the level of importance at the time of signing your agreement and now for the following benefits:• Upgrades: Version and Step Up Upgrades• Windows Enterprise 7, MDOP• Desktop Virtualization• Support - 24x7 calls, Web Support, Technet• eLearning for end users (online training)• Classroom Training for IT staff• Deployment Planning• Multi language Rights• Virtualized Applications• Roaming Use Rights

4. Prior to making your Microsoft software purchase how much effort was devoted to the following activities? • Created technology roadmap • Compared licensing programs to determine the

correct fit • Completed cost/value analysis of software

assurance by individual product families• Researched Microsoft product use rights • Examined different licensing models to find the

best fit • Issued an RFP to find the lowest price• Researched vendors for one with a strong

licensing support structure

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5. Rate your satisfaction with Microsoft licensing.

• Microsoft eLicense site and sales support• Microsoft software assurance benefits use and

adoption • Vendor knowledge, license support and reporting• Ease of license management• Ease of budgeting • Comfort level with software spend

6. Do you agree with the following statement?

a) Dropping Microsoft Software Assurance to save money in the short term has resulted in companies overspending to reach their technology requirements.

b) Choosing a vendor based solely on price causes many companies to overbuy software and overspend in management.

c) Microsoft’s hosted applications (SaaS) are available to save IT costs and simplify licensing.


Cut through Microsoft licensing complexity

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