Forecast or Improvise – What Is Your New Strategy at the End of the Enterprise Agreement (EA)?

January 21, 2016
Charlie Weber


Charlie Weber

Technical Services: Cloud Solutions Strategist at SoftwareONE University of Wisconsin-Milwaukee Linkedin

As has been widely publicized, Microsoft will be increasing the minimum seat count for Enterprise Agreements (EA) from 250 to 500 users/devices. I would argue that this is a benefit towards the next generation of software, towards Microsoft’s vision of a Mobile-first, Cloud-first world, which is focused on cloud computing and the consumption of those cloud products.

As technology evolves, so does the means to license that technology. Now is the time to consider how you want to approach your licensing strategy.

The sales pitch for an Enterprise Agreement is becoming obsolete.

Many years ago when the customer first signed their EA, sales reps delivered their usual EA pitch:

  • You have more than 250 seats? Then the EA is the most fiscally strategic licensing vehicle.
  • Standardize your environment with a 3 year lock-in price.
  • Upgrade to the latest version whenever you wish through Software Assurance.

Ensuring customers use the product wasn’t strategic to the sales process; rather, customers included cloud products in their agreement because it brought with it the prospect of future-oriented technology, but more importantly – a more noticeable discount. I would argue that these customers knew full well they weren’t going to adopt, but were looking for a checkbox discount on their overall contract.

With the transition to cloud fully along the way, Microsoft’s internal support capabilities are being extended, to say the least; they simply cannot scale to the degree that customers were adopting. With the introduction of the Cloud Solution Provider (CSP) program (which is a license that includes partner support for cloud products), Microsoft is moving back towards being primarily a software company, i.e., Office 365. Microsoft knew full well that the only way to gain adoption towards cloud was to offer a path that included confidence in the adoption. Confidence is built through expertise.

Forecast-focused customers want to know how to plan going forward.

The “forecast confident customer” is that rare breed of customer who understands where their particular business goals will be, technologically speaking, in more than 2-3 years down the line. The EA isn’t scary to these customers because they’ve forecasted their product roadmap and can upgrade and migrate through SA.

However, the sub-500 seat EA is being taken away, so where do they go next?

The warm fuzzy feeling of perpetual products (compared to subscription models commonly associated with the cloud) has not gone away at all; there are still enterprise contract solutions for perpetual in theMicrosoft Products and Services Agreement (MPSA).

Customers that included products within their EA structure with the hopes of “getting around to it” were the most volatile of the EA customers because they hoped to achieve all their goals but also felt the most burned when a project was sidelined because of their aggressive timelines, so EAs were either loved or hated. ROI was always the question for these customers.

Buy – Migrate – Use – Validate – Change; an almost unthinkable concept in the EA world. 

This is standard practice in the CSP world.  Down to the product, billed down to the day of usage, with a vested partner in your cloud administration and management provided by SoftwareONE.

The CSP program empowers customers to advance their cloud adoption as a circumstance of the contract vehicle:

  • A short-term, tenant-based contract that allows for monthly billing.
  • True-ups in product counts for actual usage, True-downs for stagnant uses of products.
  • Billing to the day of install to the day of deletion.
  • Pay for what you use, support is always there throughout the agreement from your CSP partner.

Analytics of usage trends is the future of intelligent cloud computing. How you use the product, how to minimize waste, and how to maximize ROI on the license purchases is the future of volume licensing. CSP bundles Cloud Support to include reporting analytics on the Cloud tenant level, as well as on the product specific level. Forecasting your technology footprint seems passé. Technology changes in light years, so why shouldn’t your buying vehicle do the same?

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