LGI Group

LGI Group is a German end-to-end infrastructure group headquartered in Herrenberg near Stuttgart. Part of the €1.4 billion Elanders Group, LGI group employs 5,000 people and operates out of 50 locations across Europe.

The group offers supply chain management expertise across a range of sectors such as medical equipment and in-vitro diagnostics products, fashion brands, and lifestyle logistics.

At the end of 2022, the company engaged SoftwareOne to optimize its portfolio of Microsoft licenses. Lead on this project was Denis Karbstein, Information and Cybersecurity representative at LGI Group. “I had been responsible for Microsoft 365 licensing in my previous role,” he explains, “so it fell on me to oversee this initiative.”

There were three reasons why LGI Group decided to scrutinize its Microsoft licensing position. “However, compliance wasn’t one of them,” says Karbstein. “The project was cost-driven.”

Microsoft had announced a price increase for April 2023. “Precisely when our CSP was coming up for renewal,” Karbstein adds. The vendor was also switching to semi-annual pricing updates to cushion it against exchange rate variations for non-US dollar licenses. “This left LGI potentially exposed as our Microsoft contracts were in Swedish krona. LGI Group is owned by the Elanders Group – a Swedish holding company, quoted on the Stockholm stock exchange. But most of our revenues are in euros so this was an anomaly.”

The third factor was that LGI Group’s former Microsoft partner was also increasing its prices.

“In short, it was the right time to reconsider how we provisioned and managed our Microsoft licenses,” says Karbstein.

LGI had not worked with SoftwareOne previously but SoftwareOne’s optimization experience and story appealed. “SoftwareOne also made us feel confident that our timeline would be met and that was important with our CSP coming to an end in April. If you don’t act before the termination date, Microsoft rolls over your contract and that’s the last thing we wanted.”

SoftwareOne’s Swiss consulting team was responsible for the project. Tobias Barz, Sales Executive at SoftwareOne, describes the steps of the optimization process.

“The first important decision was to switch LGI Group to Microsoft’s New Commerce Experience (NCE) program before April 1, which locks you into the ‘old’ price for another year and also gives you a currency advantage.

“We profiled the Microsoft users at LGI Group, analyzed the server environment, and achieved a large decrease in cost for the new three-year license agreement,” concludes Barz.

LGI Group cut its Microsoft licensing bill by some 20%, saving the infrastructure group more than € 100K over the duration of its CSP.

“A very satisfying result,” Karbstein comments, “and one that surprised me. I will admit that my expectations for this optimization project were not huge because we thought that we had a pretty smart mix of E3 and E5 licenses already. But not smart enough!”

Thanks to the analysis of SoftwareOne, the number of E1 and E3 licenses was scaled back because users did not need – and never used – its additional functionalities. Most of the blue-collar employees working at LGI Group warehouses do not need Microsoft at all – and so the overall holding could be reduced.

The collaboration with SoftwareOne met its cost-saving objectives, but Karbstein also wants to emphasize the ease with which this project was executed.

“We migrated some 2,500 users to the SoftwareOne license portal over a weekend – and no one coming into work on Monday seemed to notice which is precisely what you want. There was just a single complaint – something about a mailbox looking different, very minor. All in all, this was the smoothest migration I have ever experienced.”

Why SoftwareOne?

LGI Group’s existing Microsoft partner announced it would be increasing its prices just months before the group’s CSP with Microsoft was coming up for renewal. LGI had not previously worked with SoftwareOne but the optimization team put together a compelling case that cost savings would be found and that the tight renewal deadline could be met. In the event, the project with SoftwareOne saved LGI Group 20% on its Microsoft licenses over the three years of the new agreement. The cultural fit was there, and the results were better than had been anticipated. LGI Group is broadening its collaboration with SoftwareOne, which has already been engaged in two additional projects.