Recent Changes to Microsoft Enterprise Agreements:

Impact on CustomersPaul DeGrootSenior ConsultantSoftware Licensing Advisors

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Who are Software Licensing Advisors?Who are Software Licensing Advisors?Mission: “The Customer’s Advocate”Too many customers rely only on Microsoft or a reseller, who focus on what they want to sellLeaves most customers with software they don't deploy or don't need While projects or investments with demonstrable ROI beg for funds

SLA focuses on value and fitWhat you need to buy and the best way to buy itAlign IT spending and strategies with corporate objectives and constraints

“"I've learned far more from this engagement than I expected. You really made a difference.."--High-tech manufacturing firm that reduced EA

spend by 50%

“"I've learned far more from this engagement than I expected. You really made a difference.."--High-tech manufacturing firm that reduced EA

spend by 50%

“"Your team has been absolutely fabulous..."

--Fortune 500 consumer products firm that reduced

EA spend by 60%

“"Your team has been absolutely fabulous..."

--Fortune 500 consumer products firm that reduced

EA spend by 60%

“We exceeded our expectations for these negotiations. Because we had

your intelligence, we knew what to hang on for. You really showed us the art of

the possible.” --Global 25 resource company

“We exceeded our expectations for these negotiations. Because we had

your intelligence, we knew what to hang on for. You really showed us the art of

the possible.” --Global 25 resource company

“Your financial models, worksheets, and strategies were invaluable. Outstanding work.”

--Global 100 pharmaceutical firm that reduced 3-year EA spend by more than $30 million

“Your financial models, worksheets, and strategies were invaluable. Outstanding work.”

--Global 100 pharmaceutical firm that reduced 3-year EA spend by more than $30 million

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Today's PresenterToday's PresenterPaul DeGroot, Senior Consultant, Software Licensing AdvisorsIndependent analyst and consultant, covering Microsoft licensing for 15 yearsDeveloped licensing practice at Directions on MicrosoftCreator and leader of the most comprehensive workshops on Microsoft negotiations and licensingUpcoming workshops in Seattle (April 14-16) and Washington, DC. (April 29-May 2) More information at http://msftadvisors.com/workshops.html

Advised hundreds of organizations on Microsoft licensing over the last 4 years300 to 125,000 seatsRealized savings of $250 to $700 per employee, saving companies >$250 millionAuthor of Microsoft Licensing ConceptsAvailable on Amazon

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EA OverviewEA OverviewMidmarket through global enterprise customersA single agreement can cover multiple geographiesDeepest license discountsBased on count of PCs and/or users in the organizationEasy proxy for licenses

All purchases include Software AssurancePrimarily for perpetual PC software licensesServers, subscriptions, & online services also available3-year agreementDivides products into Enterprise, Additional, and Online ProductsRequires an annual count of licenses and “true-up” payments for any added since the previous count

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Key Microsoft Licensing DocumentsKey Microsoft Licensing DocumentsDocument Description

Product Use Rights (PUR)

Rights granted for on-premises products licensed through volume programs

Online Services Terms Product use rights for online services

Product List Which products are available in which volume programs

Microsoft Business and Services Agreement (“Master Agreement”)

Basic legal terms for most volume licensing agreements; verification of compliance

Enterprise Agreement Definitions, how the EA works; obtaining, transferring, copying, re-imaging software; applicable use rights

Enterprise Enrollment(s)

Definitions; ordering requirements for various categories of licenses; true-ups; verification of compliance; pricing

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Recent Changes to Enrollment LanguageRecent Changes to Enrollment LanguageMore discretion for Microsoft

Enrolled Affiliate may add new Enterprise Products by entering into a new Enrollment or as part of a renewal. New Enterprise Online Services may be added by contacting a Microsoft Account Manager or Software Advisor.

New Enterprise Products or Enterprise Online Services may be added by contacting a Microsoft Account Manager or Software Advisor. [Enterprise products = products that must be licensed for all users or all devices]

If Enrolled Affiliate qualifies for a different price level during the applicable initial or renewal term, Microsoft will establish a new price level for future new orders either upon Enrolled Affiliate’s request or on its own initiative.

If Enrolled Affiliate qualifies for a different price level during the applicable initial or renewal term, Microsoft may at its discretion establish a new price level for future new orders either upon Enrolled Affiliate’s request or on its own initiative.

Previous Terms New Terms

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Mixing User and Device LicensesMixing User and Device Licenses

If ordering any Enterprise Products, Enrolled Affiliate’s order must include coverage for all Qualified Users or Qualified Devices, depending on the license type, of one or more Enterprise Products or a mix of Enterprise Products and the corresponding Enterprise Online Services.

...Enrolled Affiliate may elect to mix Enterprise Products and the corresponding Enterprise Online Services within a Product pool as long as all devices not covered by an Enterprise Product are only used by users covered with a per user license.

Previous Terms New Terms

Users of licensed devices (Windows and Office in a standard EA) must be kept away from devices licensed by user. Windows VDA (per user), Enterprise Cloud Suite, Office 365 ProPlus do not supply device licenses. Users without these online services subscription may not use devices on which user-licensed software has been installed

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True-Up Changes: What to CountTrue-Up Changes: What to Count

The word “any” was added to the changes that a true-up must account forLicense re-assignments? Movement of virtual machines to different hosts? SA reassignment?

Enrolled Affiliate must submit an annual true-up order that accounts for changes since the initial order or last true-up order, including: (1) any increase in Licenses, including any increase in Qualified Devices or Qualified Users and Reserved Licenses; (2) Transitions (if permitted); or (3) Subscription License quantity reductions (if permitted).

Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order.Enterprise Products....Additional Products...Online Services....Transitions...Subscription License reductions...

Previous Terms New Terms

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True-Up Changes: How Much to CountTrue-Up Changes: How Much to Count

Instead of simply counting the difference between servers in use last year and servers in use this year, customers must count the maximum number of instances reached at any time.Retailers: Server inventory on Black Friday.Hospitals: inventory during major disaster or flue epidemic. Everyone else: constantly monitor use of each product to determine the moment usage hits the annual maximum

Additional Products. For Products that have been previously ordered, Enrolled Affiliate must determine the Additional Products used and order the License difference (if any).

For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the intial order, the last true-up order or the prior anniversary date and submit a true-up order that accounts for any increase.

Previous Terms New Terms

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Verification: The Easy Way or the Hard Way?Verification: The Easy Way or the Hard Way?

ImpactValidation of true-up dataCannot happen before true-upNo penalty except extra true-ups, at true-up pricing

Microsoft, at its discretion, may validate the customer true-up data submitted through a formal product deployment assessment using an approved Microsoft partner.

Verifying compliance. Microsoft may, in its discretion and at its expense, verify compliance with this Enrollment as set forth in the Master Agreement.

Previous Terms New Terms

ImpactValidation of all license countsCan happen at any time on 30 days noticeAuditor may demand access to customer systems

If unlicensed use > 5%, then..Customer pays for the auditRequired licenses purchased at 125% of the usual price

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What to do?What to do?Consider Select Plus or the MPSANo concept of “Additional” or “Enterprise” ProductsNo companywide licensing requirementNo SA requirement“Maximum Use” requirement easier to manageNo need to track “any” changeUser licensing still available in the MPSA—if you dareContract amendmentsAssert prior language where beneficialRequire ALL audits and validation for any product in the EA to happen in the true-up time frameWith compliance achieved through true-up pricing, not punitive 125%

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Software Licensing Advisors ServicesSoftware Licensing Advisors ServicesSoftWatch Software Asset ManagementDetailed insight into user interactivity guides negotiations and purchasing, particularly for Office

Always-on service and real-time dashboards automate complianceLicense ReconciliationSoftware inventory and reconciliation with Microsoft Licensing Statement, customer purchasing records

Essential service for audit defense and negotiationsKnowledge TransferCorporate Microsoft Licensing Workshops bring your people up to speed on MS licensing

Retainer AgreementsOngoing access to Microsoft licensing expertise Microsoft Services ReviewMinimize costs and ensure accurate and relevant reporting from Microsoft

Audit DefenseProactively define corporate licensing standards, protocol for audit requests

Challenge Microsoft compliance demandsM&AEvaluate assets and effective licensing position for due diligence during corporate merger or acquisition

Microsoft Negotiations and Licensing WorkshopsHow Microsoft products are licensingOn-premises, cloud, hosted

Volume licensing agreementsEA, Server and Cloud, Select, MPSA

Negotiation processes and strategiesSpecial topicsMobile devices, hosted systems, MSDN, management tools, VDI, virtualization

Seattle (April 14-16)Washington, DC. (April 29-May 2)More information at http://msftadvisors.com/workshops.html

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LinksLinksWhite Paperhttp://msftadvisors.com/SLA2015EAContractChanges.pdfOr http://msftadvisors.com/resources.html

Microsoft Licensing and Negotiations Workshopshttp://msftadvisors.com/workshops.html