How Will VMware License Changes Affect Your Software Spending?

Changes to VMware’s Pricing

VMware has announced that effective April 2, 2020, new license changes will be applied to their customers’ Central Processing Units (CPU), but what exactly does that mean for you and your company’s software budget? At MetrixData360, we know how quickly the world of licensing can change, so here is everything you need to know about the latest VMware license changes.

Quick Tutorial: CPUs, Cores, and Their Licenses

A CPU is basically the brains behind your computer. It’s a chip that sits on top of the motherboard (which contains all the memory of your hardware), and it fetches, decodes, and executes instructions the same way your brain receives information from your body, processes it, and responds accordingly.

Without your CPU, your laptop is nothing but an expensive paperweight. The cores of a CPU are what process the information a CPU has been given.

Traditionally, a CPU has only one core, but modern CPUs have multiple cores that can each handle their own tasks and if the computer you’re using has multiple CPUs, each with multiple cores, then you will experience greater performance from the computer with quicker results.

VMware’s New Changes to Their Licenses

Before this license change, VMware software was primarily licensed per CPU, which meant that a single CPU could have dozens of cores and would only need a single license. Since CPUs have so many cores on them, VMware has viewed this as a loss for potential revenue and has struggled to find a way to capture it.

VMware has toyed with the idea of charging for this consumption use, with little traction gained from the market but now they have come up with a solution.

While you can still purchase your licenses per CPU, there is now a limit for the number of cores that CPU can have in order for the license to cover it. With these new changes your CPU may only have 32 cores on it before you are required to purchase another license. A single CPU may need two licenses depending on the cores that it houses. Below is the chart taken from VMware’s Update to VMware’s per-CPU Pricing Model page to help clarify the issue.

What Does this Mean for VMware Customers?

Seeing as the average CPU only has 20 cores on it, the majority of businesses will not see many changes to their licenses or their software bills. Ryan Knauss, vice president of licensing and pricing for VMware, promises that the model was designed so that existing customers would experience “zero impact”, since AMD has very few levels available that have more than 32 cores.However, those with dense CPUs with potentially 64 cores will see their license requirements double for every CPU as of April 2, 2020.

With so many businesses moving their software estates to the Cloud, and so many as-a-Service services out there, charging based on consumption or charging based on cores has been the route that many software companies are adopting, and this is simply VMware’s attempts to align their pricing models with that transition.

Knauss also is quoted by CRN to say that he hopes to promote subscriptions and non-perpetual licensing, whether on-premise or in a hybrid solution for the Cloud and on-premise, as a bigger element in their business in the future. Any customers who have deployed VMware software on CPUs that have more than 32 cores, or those who have purchased a server with more than 32 cores per CPU before April 30, 2020, are eligible to apply for free additional per-core licenses.

Of the hundred and thousands of servers that MetrixData360 has seen, less than 5% have any CPUs with more than 32 cores, which leads us to suspect that the impact of these changes will be minor for now. But IT organizations should take this into consideration when configuring their architecture for the future. This may be a response to newer CPUs that are scheduled to be released that simply come with more than 32 cores. It is a move to keep a competitive edge over how CPUs will be configured in the future.

For More Information

License changes happen constantly and depending on your company’s software estate, it may be difficult to impossible to have a clear image of every license for every software vendor. This is why having a strong software asset management (SAM) process is so important.

At MetrixData360, we deal with license changes like this all the time and we know how to help your company develop a SAM process that accounts for such changes, so that you are not left to the risks of non-compliance. If you would like to learn more about how MetrixData360 can help you achieve your software asset management goals today, click the link below to check out our SAM as a Service Page.

How Will Your Software Contracts Be Affected By COVID-19?

These are scary times we live in; toilet paper is hard to come by all of a sudden, we’re all staying home if we can, and washing our hands for at least 20 seconds (although that one you probably should have been doing already). The Software publishers are showing a lot of grace towards their customers and prospective clients during this time; they have not been aggressive in their sales, they are delaying renewals, and have limited their audits.

Despite their leniency now, the long-lasting effects that COVID-19 could have on our global market could means that software publishers may be desperate to make up for their loss of sales during this pandemic. In these uncertain times, many of our customers are asking what will this mean for their software budgets? We know that the organizations that come out of these messes with minimal damage are the ones that act fast and work twice as hard. At MetrixData 360, we like to keep you informed about how you can curb the damage of this crisis.

Areas to Reduce Software Costs During a Crisis

  • Maintenance Contracts

At a time when it is necessary to be wise with our spending, examining your maintenance contracts is a great place to start. If you are running old versions of the software in question, your maintenance is nothing but an expensive support policy. Remember, software publishers make 80% margins on Support/Maintenance, so be sure it is something you need. We have seen more than one customer paying hundreds of thousands of dollars to run a version that is five years old, with no plans to upgrade, and having placed only two or three support calls on the product in a year, as opposed to once per quarter.

  • Subscription Contracts

The devil is in the details, so read your contract over to see how and when you can reduce your license counts. If the timing isn’t right for your contract to be rearranged, brainstorm ways to get your vendor to negotiate with you. It is likely that they will only become more unwilling to reduce counts as the crisis nears the end.

  • Pre-Committed Cloud Spends (Particularly with AWS/Azure)

Heading to the Cloud? Since being able to work remotely is more important than ever before, it may be tempting to rush any Cloud deployment your company may be planning. However, rushing to the Cloud is how many of our clients wind up with wasted spending, which is the last thing your company needs right now. Since the transition to the Cloud has often resulted in unforeseen spikes in cost, see if you can put off any scheduled Cloud deployment to prevent you from paying for any unforeseen Cloud costs during this time of crisis. Tell the vendor that you would like to move your deployment to next year or the year after, to free up your business to focus on more short-term cash flow. If your company is already situated in the Cloud, make sure you are only paying for what you need, if you discover anything you are not using, shut it off, so that you can stop paying for it.

  • Consider Renewing and/or Extending Your Contracts Now

Contract negotiations are expected to get tougher following this crisis, as software vendors struggle to recover lost sales. Therefore, it’s important to get ahead of this, open-up a negotiation of new terms and conditions with your software vendors as soon as possible to see if they are not willing to renew, or at least extend your contract, given the tumultuous nature of the situation. In order to conduct a successful contract negotiation, you will need to have accurate inventory data and the ability to determine the future needs of your company (as best you can, given the circumstances). This is achieved through following an effective software asset management process.

  • Look at Maintenance Costs Compared to Rebuy Scenarios

Sometimes it is better to rebuy a whole new license compared to paying for upkeep – especially when it comes to old support contracts that have annual increases. After several years, simply rebuying the license can give you greater value.

  • Look for Spots that IT Can Re-Architect to Save License Costs

The internet is currently speckled with articles for how to keep yourself busy at home and organizing is one of them. The same thing can be applied to your IT Infrastructure. Clearing out all the clutter and reorganizing your space to be more cost-effective right after your return to the office is a great way to realize potential savings. See if you cannot create a dev cluster, or group older versions on the same hosts/clusters, for example.

  • Review Contracts and All Clauses that Speak to Licensing or Costs

While you are self-isolating or social distancing, you can review your software contracts. Perhaps you can save money on Disaster Recovery, or on a dev/test product that you’re paying for full production licenses for. There may easily be alternative licensing types that can save you money that you never even thought of before or perhaps you can negotiate a special use clause for this situation.

  • Unneeded Licenses Under Support

If you have licenses that are supported by your company that aren’t needed or used, you can negotiate a one-time trade in. This can get you things you can use or will need in the future.

  • Review Your IT Environment for Duplicate Functionality

Look for areas where you have two products serving the same function such as security software, consider using the Security licenses from MS instead of Symantec/McAfee, for example. Now is a good time to start consolidating vendors to streamline your licensing structure.

  • Review Usage / Metering / Functionality

Now is the time to reclaim licenses and put them back in stock for future needs. See if you can negotiate out unused subscriptions or licenses from maintenance contracts or consider moving employees from Advanced to Standard suites to decrease costs. It’s more important than ever that you pay for only what you need.

BONUS – Annual Price Increase in Support

If you have an annual price increase, try your best to negotiate it out of your contract. If you signed a multi-year deal with increasing year over year prices, negotiate for the current year’s price, given the situation.

Software Asset Management to Save Your Business Money

During this time of crisis and the time of recovery that will be necessary afterwards, software asset management for your business might seem like an expensive luxury, but in fact, it has the potential of granting your company massive Return on Investment. Now is not the time to have an under-licensed or over-licensed software environment, which with any way you tip it, you will risk losing money either through paying heavy auditing fines or through paying for too many licenses. By successfully implementing software asset management you gain the following:

      • Control Over Your Software: your spending is no longer dictated by what the software publishers tell you, whose primary motivation is for you to spend more and more money with them. Instead your spending is dictated by your company’s needs and growth plans. This means no more wastage as companies without a proper software asset management process implemented are expected to have roughly 30% of their software licensing environment be either wasted or underutilized.
      • Reduced Security Risk: Could you imagine a security breach right in the middle of this chaos? That would be quite the when-it-rains-it-pours situation. As we covered in our article, How SAM can Improve Your Cyber Security, Software Asset Management can reduce the risk of your company facing exposure to a software breach, since hackers will often use old, unaccounted for software as a way to wriggle into your environment. Software asset management can be a valuable asset for your IT security by providing visibility into your licensing and usage, exposing any malicious activity.
      • Accuracy and Peace of Mind: These troubled times can lead to a lot of uncertainty and software asset management can at least take your software off of your mind. If you know what is in your software environment, and you know that it is doing its job in the most effective way possible, then you will be ready and capable should you be faced with an audit.

For more information on what Software Asset Management can do for your company, check out our article, What is Software Asset Management?

A Message From MetrixData 360

We recognize that it is important that we do what we can to get through this. We need to slow the spread of the virus by staying home whenever possible and by practicing social distancing.

At MetrixData 360, we take this pandemic quite seriously and we extend our deepest gratitude to public health officials, researchers and team members on the front lines and to the world governments who have taken extensive action to battling this pandemic. It is important for businesses to be aware of the long-term effects that this virus could have regarding your software licensing environment. Software asset management can save your company money at a time when it is important to be responsible with how funds are allocated. For more information on how MetrixData 360 can support your business through this economic turmoil, you can contact us and we’d be happy to answer any of your software licensing related questions.

Office 365 vs Microsoft 365

It doesn’t matter if you’re working from your office or at home or up a tree, it seems that companies are rushing to take their business to the Cloud, and that includes where employees are expected to do their work. Microsoft has been quite aggressive in their focus to move their industry (and their customers) to their Cloud platforms, including their two most popular Cloud productivity services. Today we’re breaking those services down in a head-to-head comparison. It’s Microsoft Office 365 vs Microsoft 365.

While they may seem similar in name, they both offer unique levels of functionality and cost. So, which one is best suited to your needs?

At MetrixData360, although we are unaffiliated with Microsoft, we pride ourselves in educating our clients, so that businesses everywhere can make informed spending decisions regarding their software.

Office 365

To put it succinctly, Office 365 offers a variety of the most popular Microsoft products like Word, Excel, PowerPoint, and OneDrive, all of these offered programs are geared towards business productivity such as Skype for Business, SharePoint, Teams, Yammer, and Planner.

These services can be found either online or on-premise through a subscription-based payment plan. Plans with Office 365 offers to host Microsoft Exchange mailboxes. There are also additional add-ons that you can pay for, this includes additional security.

This is the main argument Microsoft will use to get you to switch to Microsoft 365, since with Microsoft 365, these add-on features are included in the package, as opposed to having to pay for additional fees. However, that doesn’t always mean the transition is worth it, especially if you are not expecting to use every feature in Microsoft 365.

To give you a taste of all the plans that are available to you, here are two different versions of Office 365:

Office 365 Business

This plan is an excellent, low-cost way for getting key components of Office 365 to your company with either the Essential, Business, or Business Premium plans. However, this skin-and-bones plan comes with a few drawbacks:

  1. It doesn’t allow for remote desktops to have access to Office 365.
  2. Office 365 Business is not compatible with Nerdio for Azure (NFA) environment, for instance.

If you’d like to compare Office 365 Business package pricing, you can find a basic outline of the plans here.

Office 365 Enterprise

ProPlus, E1, E3, and E5 all offer varying levels of Office 365 Enterprise, which is aimed primarily towards providing Enterprise productivity.

Excluding the E1 license (which actually doesn’t include any application offered with it, only the services), all of these plans come with Office ProPlus and are suitable for Remote Desktop Service (RDS) environments. If you want to maintain any Nerdio environments, at minimum you’ll need an E3.

Changes to Office 365 ProPlus Licensing

Microsoft announced that beginning in the summer of 2020, Office 365 ProPlus plans would allow licenses to be assigned to Windows 10 devices as opposed to it being assigned to the user.

The same can be applied to Office 365 ProPlus for education. This can prove highly beneficial if multiple users are sharing one device. However, there are some catches when it comes to the device-based licensing. For instance, commercial customers can only use Office ProPlus through their EAs, and for education customers, they will only be able to access Device-based licensing for Office 365 ProPlus through their Enrollment for Education Solutions (EES).

In order to use this device-based licensing, customers must meet certain requirements:

  • They must have Version 1907 or later for Office 365 Plus or Version 1803 or later if they have a Windows 10
  • All Window 10 devices must be joined to Azure Active Directory or joined to hybrid Azure AD.

If you’d like a full examination of the different Office 365 Enterprise Plans, you can find the outline here.

Microsoft 365

Microsoft 365 can basically be thought of as Office 365 with added bonuses. It’s a bundled offer of existing products, including Office 365, along with Windows 10 Pro and Enterprise Mobility + Security.

Windows 10 serves as Microsoft’s safest and latest operating system, complete with BitLocker and Windows Defender Anti-Virus. Mobility + Security is an extra layer of security for your data, including mobile device and identity management.

Microsoft 365 is the response for small- to medium-sized businesses who were going to purchase Microsoft 365’s three major components (Office 365, Windows 10, and Mobility + Security) separately on three different platforms. So, Microsoft 365 is marketed towards businesses who want to have a single, secure platform that can be shared across the company.

If you are negotiating any sort of contract renewal with Microsoft and you already have Office 365, you can expect pressure from Microsoft to scale up to Microsoft 365 from Office 365.

There are some obvious benefits to getting Microsoft 365; the fact that it is an all-inclusive package that provides a single platform for everything, creating an easier end-user experience, makes a compelling case. If you choose Microsoft 365, there are a few choices that are available to you.

Microsoft 365 Business

Centered around SMB deployment and designed for 300 users or less, this plan includes Office 365 Business and some of the most basic device management, although it is considered the next step up from Office 365 Premium plans.

It should be noted that this plan doesn’t use Office ProPlus in its package, which has significantly more features than Office Business. It’s really a win-some and lose-some situation.

Here’s a link for more information on the Microsoft 365 Business Plans.

Microsoft 365 Enterprise

This plan is marketed heavily towards larger businesses with an emphasis around strong security and device management functionality.

It bears a lot of resemblance to Office 365’s E3 and E5 plans with a bonus of Windows 10 Enterprise, EMS features, Azure Information Protection, Office 365 Advanced Threat Protection, and Microsoft Intune with availability on-prem and on the Cloud.

Microsoft Enterprise is broken down into three plan options: F1, E3, and E5.

Click here if you’d like more information on the Microsoft 365 Enterprise plans.

Microsoft 365 Education

Microsoft 365 Education is another exclusive offer that is given to schools that can be used by both teachers and students. There are three plans that are offered with Microsoft 365 Education:

  • A1 – The basic package which includes the lowest tier information protection, and a free, although limited, version of Office for students and teachers.
  • A2 – The standard suite, which includes everything in A1 with the addition of all the Office desktop apps and strong information protection and security.
  • A3 – The premium tier includes everything from A3, plus advanced security and compliance tools, along with top analytic systems.

Click here for more information on Microsoft 365 Education plans.

Office 365 Reporting Tool: Why is it Important?

Regardless of which plan you pick, it’s important that while you are using Office 365, you have a means to effectively monitor your usage. This will allow you to predict and potentially eliminate any consumption issues before they arise in an audit.

To address this issue, at MetrixData360, we have our exclusive Office 365 Consumption Reporting Tool available for installation. There are a few main benefits that come from having Office 365 Consumption reporting on your side, including but not limited to:

  • Detecting Multiple Subscriptions

    MetrixData360 have often seen that our clients will have multiple subscriptions for Office 365 that they have accidentally repurchased over time. These redundancies often make for a quiet drain on the IT budget.

  • Tracking Consumption of Subscriptions Over Time

    Being able to track your use of subscriptions will allow you to track not just how much you owe, but also what sort of value these subscriptions are bringing to your company.

  • Detecting Blocked Users

    How do you know you have a subscription when you don’t have access to an application or program?

    It may seem as though those two situations are polar opposite of each other, but we have often seen that case appear unknowingly in the software profiles of the clients that we have examined.

    Sometimes this blockage is intentional, but other times the customer is unaware of these users and by removing their subscriptions they can save a lot of money.

  • Detecting Last Usage

    MetrixData 360’s Office 365 Consumption Reporting tool can pick up if an account hasn’t been active in 90 days or longer.

    Such inactivity usually means that the account has been retired (or at least attempted to be) or it simply belongs to a user who doesn’t need the subscription.

    Either situations can easily remain a drain on your budget and presents the potential to reclaim licenses.

For more information on how MetrixData360’s Office Consumption Reporting Tool can give you control over your software spending and usage, check out our tools page for more information!

To Summarize

With so many different plans and packages to pick from, the Office 365 vs Microsoft 365 debate comes down to what is right for you.

So long as you have a means of keeping track of that consumption, you can certainly find a package that fits your interests without proving a drain to your software budget.

At MetrixData360, we have often seen companies either underestimate their usage, leaving them at risk for compliance issues; or we have seen them overspend eroding their IT budget.

We know how to navigate our customers around such pitfalls when it comes to their software. If you’d like to learn more about how MetrixData360 can give you the visibility you need, contact us and we’d be happy to answer any of your software licensing related questions.

Rebounding from 2019 May Mean More Micro Focus Audit Requests

Micro Focus did not have a good 2019 and customers should expect to see more Micro Focus audit notices this year because of it. On Valentine’s Day of 2020, Micro Focus’s Executive Chairman Kevin Loosemore has stepped down from his role as a leader after fifteen years on the job and a 6-8% dip in sales with a staggering 30% revenue drop.

Those are some harsh numbers to work with and it would probably be a bit nerve-racking for Micro Focus’ customers or prospecting customers? Is now the time to buy or is it better to jump ship now? At MetrixData 360, we have gone toe-to-toe with Micro Focus on many different occasions and we have gotten to know their business strategies quite well. With these tough times ahead for Micro Focus, here are a few things that you can expect as a Micro Focus customer.

1. Expect More Micro Focus Audits in the Future

Micro Focus is already known to be an audit-heavy software vendor, but this extra pressure to drive revenue back up in the wake of such a challenging year could mean that if you have Micro Focus software, a software audit might be around the corner.

Being prepared is the best thing you can do. To get ahead of your Micro Focus Audit, here are some tips specifically geared towards Micro Focus’ tactics of auditing, according to ITAM’s Review, along with some of our own findings:

  • Pay close attention to Micro Focus contracts, make sure that terms like “authorized user” are clearly defined, since Micro Focus has the tendency to put vague terms in their EULA that can create confusion that is exploited later in an audit.
  • Ensure the licensing metric as outlined in your contract is also clearly understood to everyone internally. A lack of understanding will make it unclear what you’re supposed to count to remain in compliance or how they will collect or count usage data in an audit.
  • If your Micro Focus products are accessed through servers like Citrix or through VDI’s, make sure that you are licensed according to Micro Focus’ metric. Micro Focus will want to see that you have control overs in place to ensure who has access to their products. Otherwise, they will require that everyone with access to the products is licensed (access rights), as opposed to simply licensing those who use the product (use rights).

2. HP Products Might Be the Target for Audits

Micro Focus purchased many software products from HP Enterprise back in late 2016 for $8.8 billion, and since then we haven’t seen them target HP users in any of their audits. Up until now, they have mostly been auditing for products such as Rumba, Attachmate Extra, and their Resource Access Control Facility (RACF).

With their recent revenue challenges, we may begin to see audits expanded to include legacy HP Products since it is a viable area for software audits that they have not exploited as of yet.

If you’d like to learn more about how you can get ahead of the auditors and be prepared for your next software audit, check out our article, 5 Secrets to Prepare for a Software Audit (And Save Money).

3. Now Is the Time to Negotiate

If you’re expecting a contract renewal with Micro Focus soon or if you want to get a contract in place with Micro Focus, this might be your time to push for the deals you want.

Micro Focus is not in a place where they can risk losing deals to competitors, so this situation might give you the foothold you need to start maximizing the value of your software with Micro Focus.

Here are some tips to help you prepare as you enter negotiations with Micro Focus:

  • Consider the stakeholders. The people involved in carving out this deal for you may have different goals within their ranks. Some may be paid based on the revenue they can generate, some on your satisfaction as a client. Make sure you phrase your arguments in a way that appeals to each.
  • Prepare for a contract renewal like you would for an audit – because one might be coming soon afterwards. If you walk away from a contract negotiation having managed to cut your spending, chances are Micro Focus will compensate for the losses by sending you an audit. It would be a smart move to perform an internal audit; you should know your usage and your license requirements. This will not only get you ready for any potential audit, but it will also allow you to make better spending decisions during the negotiations.
  • Be Ready to Apply Leverage when needed. A well-timed call to the right person can be very effective to unblock a stalemate in the process.

If you’d like to learn more about how to strike up a deal that serves your company’s software needs, check out our article, Guide to Negotiating Software Contracts.

Going Forward With Micro Focus

The software industry is a fast paced one and it’s important to keep ahead of the curve. It’s unlikely that Micro Focus will find themselves out of the game just yet, they have enough revenue to pool from their contract renewals but this heavy hit could mean you’ll start to see some changes in the company if you are a customer of Micro Focus or are considering signing a deal with them.

At MetrixData360, we like to keep you informed to make sure that you can make educated decisions regarding your software spending. If you want to know more about the latest news in the software industry, you can sign up for our Newsletter by clicking the link below! It’s completely free and you can unsubscribe at any time.

Negotiating a Microsoft Enterprise Agreement: What to Expect

Microsoft is Changing How it Negotiates EA Renewals:
Here’s What You Need to Know to Prepare

If you’re a part of a large company with at least 250 devices, chances are you have some sort of an Enterprise Agreement (EA) in place with Microsoft. The EA offers Microsoft products at reduced prices, gives you the opportunity to add licenses while paying (true up) later, and it allows an easy way to purchase online services such as Microsoft 365.

Given the right circumstances, this can prove exceptionally valuable and highly cost-effective. If you find yourself in the wake of a looming EA renewal, there are some recent changes that you should take into consideration before entering negotiations with Microsoft.

At Metrixdata 360, after over a decade of experience dealing with Microsoft, we have noticed a change in how Microsoft approaches these renewals that may make your renewal more challenging than they have been in the past. We’ve outlined the some of those changes to how Microsoft handles Enterprise Agreement renewals below.

Pressure to Move to the Cloud

While Microsoft’s Azure may not have as many features or as wide availability as Amazon’s Web Service (AWS), Azure popularity is skyrocketing, and its sales organization is highly motivated to push you to the Cloud.

Now, Microsoft has become quite aggressive in moving its business – and subsequently its clients – to the Cloud and away from traditional on-premise licensing. This means you can expect a lot of pressure from Microsoft to get you to sign up for some commitment to Azure and other subscription-based licensing models (Office 365, Security Products, Teams Voice Features, etc.).

The particular complication that Azure presents that we have often seen occurs when companies sign up for Azure services and find out that there are many hidden or unexpected costs that can quickly add up, making it difficult to predict what the total cost will be for your company. Services that are sold for only a few cents per minute could easily cost thousands of dollars when scaled.

A big indicator that points to Microsoft’s desire to move the Cloud comes in the form of traditional on-premise products often being ignored by Microsoft. If you had discounts on these products in the past, Microsoft is removing those discounts and the revenue that is associated with these purchases is no longer of much interest to the Microsoft sales teams.

For more information on moving to the Cloud, check out our article 4 Best Practices For Cloud Optimization.

Microsoft Will Use Tight Timelines

In the past, Microsoft had internal pressure to ensure that Enterprise Agreement contracts were renewed on time.

We have seen a shift where they are now using this deadline against customers. This pressure leaves companies feeling forced to sign a contract that may not be the most beneficial for them.

Running the clock down to make a Microsoft representative sweat may have resulted in a better proposal when the actual expiration date drew near. Now, however, this strategy no longer yields the results customers are looking for as Microsoft has shifted the pressure to the customer and may not make any improvements on their proposals even when the date for renewal approaches.

Since tight deadlines no longer hold much sway, we would suggest giving yourself ample time to prepare. Previously, you may have only needed three to six months to prepare, but now, you may need nine to twelve months. The first six months should be used to ensure you have a complete handle on what you actually require from Microsoft and the remaining three to six months should be used to actually negotiate the renewal.

Microsoft Needs You to Keep Buying and Upgrading in Order to Consider You a Partner

Are you just starting to deploy to Office 365? Perhaps Microsoft will pressure you into buying security products as well. What does it matter to them that you already have a contract with another vendor, or that to make the transition from your current vendor would be a needlessly laborious task? You can expect no concession from Microsoft when it even comes to the time that it would take for you to actually move or justify those purchases.

If you own E3 licenses, you can be expected to be pressured to buy E5s and if you have Office 365, you’ll see pressure to purchase Microsoft 365.

Large commitments to Azure are constantly being pushed on customers, and we have also seen an increased interest in selling LinkedIn Services within the EA, this includes services that revolve around recruiting, sales, and marketing.

This raises a question: if you already have top-level products like E5s and there’s nowhere you can upgrade to or you simply don’t need anything new, how will you be able to get those price concessions from Microsoft that you need if you seemingly have no bargaining chips?

Download our PDF on Software Sales Rep Motivations:

Microsoft Needs You to Keep Buying and Upgrading in Order to Consider You a Partner

Are you just starting to deploy to Office 365? Perhaps Microsoft will pressure you into buying security products as well. What does it matter to them that you already have a contract with another vendor, or that to make the transition from your current vendor would be a needlessly laborious task? You can expect no concession from Microsoft when it even comes to the time that it would take for you to actually move or justify those purchases.

If you own E3 licenses, you can be expected to be pressured to buy E5s and if you have Office 365, you’ll see pressure to purchase Microsoft 365.

Large commitments to Azure are constantly being pushed on customers, and we have also seen an increased interest in selling LinkedIn Services within the EA, this includes services that revolve around recruiting, sales, and marketing.

This raises a question: if you already have top-level products like E5s and there’s nowhere you can upgrade to or you simply don’t need anything new, how will you be able to get those price concessions from Microsoft that you need if you seemingly have no bargaining chips?

Our Recommendations for Your Next EA Contract Renewal

At MetrixData360, we recognize that things are not the same with Microsoft as they have been in the past and going into your EA renewal, you’ll be confronted with a new process that is far more frustrating than it used to be, so here are some tips to help you deal with these changes:

Air Your Frustrations – Tactfully

We’re not suggesting you flip a table (despite how satisfying that might be), but be prepared for this situation to be exasperating. Microsoft will use all of the corporate structures as justification for drawing out the process and as a way to avoid legitimate business requests.

Make sure you let Microsoft know how irritated you are with this process and talk to them frequently. It will be helpful to move things along if you set up, early in the process, a weekly meeting with Microsoft and present them with small tasks to do during these meetings. This will allow you to track their progress.

Anticipate That You May Need to Purchase More Licenses Than You Use

It may seem counter-productive if you’re looking to save money and cut spending, but Microsoft is known to reward those who buy into their strategies early. Sometimes, you can get concessions that may be worth the purchase, even if you end up buying things you don’t need, such as E5 licenses and LinkedIn services.

Make sure you have a strong understanding of what a reasonable price would be for the bare minimum you require for your company. This is done through understanding your company’s usage regarding these Microsoft products. A 20% discount will still mean losses if it turns out you’re overspending by 45%, so keep that balancing act in mind if you decide to scale up.

If you’d like to learn more about the value gap in Microsoft Negotiations, check out our Youtube video from the SAM Channel.

Know Your Options and Be Assertive

Microsoft will push you to get things done quickly, and to increase your spending, so you have to be prepared to push back.

You may need to be prepared to move beyond the expiration date in order to see flexibility from Microsoft. We have seen organizations that have gone two months past the expiration date to finally reach agreement with Microsoft.

The only other option available to you to get around this unfortunate situation is to start earlier and get serious about the negotiations as soon as possible. In the past, the intensity of the negotiation came to its peak around one to three months before the renewal but now, in order to reach the most ideal agreement, negotiations should begin in earnest around three to six months before the renewal.

You also need to be prepared to escalate within your organization and with Microsoft’s.

Having a strong understanding of your software usage and current spending will give you the knowledge you need to create two or three pricing options that will allow you to decrease costs or at least to not increase it.

Don’t expect Microsoft to be any help to you in these areas, their goals are very clear, they want you to increase your spending regardless of whether it will provide greater value to you.

Hire a Professional Negotiator

There are many stakeholders involved in a contract renewal, each with different goals that need to be persuaded, what words do you use to convince them all?

You will need an in-depth look into your spending and your software usage. This will empower you to pursue the best deal possible for your company.

Also, if you do manage to lower your spending with Microsoft, it is likely that they will attempt to make up for any shortfalls in their revenue target by sending you some version of an audit, either a friendlier SAM engagement or a straight-up audit.

For this reason, it is important you get a professional to help you prepare for your EA renewal as though it were a software audit because it could very easily turn into one, depending on how things go.

If you want to know about your options for the management of your software, see our article Hire a Software Asset Management Expert or Do it Yourself? The Pros and Cons of Each.

Microsoft Negotiation Services for Your Business

Enterprise Agreements are a vital part of your business, and it’s important you prepare for your EA renewal sooner rather than later, lest you be stuck with an overpriced agreement that fails to deliver on value.

Your best defense is to be prepared and to know your data backwards and forwards.

At MetrixData 360, we pride ourselves in providing our customers with solid data that is easy to understand. If you’d like to know more about how MetrixData360 can provide you with the deals you need and the prices you want, clicking the link below will take you to our Contract Negotiation page.

Download our PDF on Software Sales Rep Motivations:

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Getting Started: Implementing Software Asset Management

Implementing Software Asset Management for Beginners

Implementing a strong software asset management strategy into your company can have massive long-term benefits in savings and overall software visibility.

When you are just beginning your software asset management journey however, all the individual data points can be overwhelming and often discouraging for companies with a large and complicated software profile.

At MetrixData 360, we teach our clients how to implement a strong software asset management program. So at glance, what does it take to get your company on track to an optimized and cost-effective software profile?

Why Implement Software Asset Management?

The first thing you need to do on your journey to a fully realized software profile is convincing your department and possibly your senior management that SAM is a good idea. There are many benefits that can be recognized in a strong software asset management solution, such as:

  • Having a strong software profile in place will mean that you will be better equipped to defend your company from any unwarranted software penalties.
  • Software audits have proven immensely profitable for the software vendors, so there’s nothing stopping them from coming back over and over again for another audit. It’s not a matter of if you’ll be audited, it’s a matter of when and how often.
  • You will be in a position where you can verify the accuracy of your data and you will have better visibility into your spending and your usage, which means you will be able to eliminate waste and deal with potential compliance issues before they are brought up in an audit. Software Asset Management puts you back in the driver’s seat when it comes to your software.
  • With SAM, you can check in on your software health and security. Hackers will often use old and unmonitored software as a means of breaching your security system.

Having an organized software estate and eliminating any redundancies will give your IT security less to manage and more visibility into what has been patched and what hasn’t. If you’d like to know more about the security benefits of SAM, check out our article How SAM can Improve your Cyber Security.

Software Asset Management empowers your IT department, as it gives them the ability to track the value of deployed software. SAM gives them the hard data that they need to advocate for the implementation of much needed software and to retire software that is no longer of value.

Where Do You Start To Implement Software Asset Management?

After you’ve been given the go-ahead to implement SAM, you will find that your software environment is a vast and overwhelming landscape, especially if no form of software asset management has been attempted in the past. How do you even begin to get organized?

  • Determine Your SAM Maturity Levels

Software asset management isn’t a switch you can flick on and off. Although many SAM tools market themselves as offering complete SAM maturity immediately upon installation of their product, this is hardly ever the case.

You gain visibility slowly over an extended period of time. Depending on the size and state of your software profile, reaching full SAM maturity could take anywhere from a few months to a little over a year.

The first step in developing a strong Software Asset Management profile is simply determining where you are in the process. This means that you will be able to map out a plan to get you to where you want to go. There are several stages to SAM maturity (it’s most often presented in five stages but Certero only counts four):

      • Chaotic, which is exactly what it sounds like. There is no semblance of software visibility present. Your only goal at this stage is to figure out what you have.
      • Reactive is where you have a sense of what is in your profile and your goal from here is to determine what licenses you have and compare that against what is in your system.
      • Compliance Plus means that you have reached full compliance; your data is visible, and you can properly defend yourself against any audit should one arise. From here you can work towards automating the process, so that this level of compliance is assured to continue.
      • Optimization means that once you have your licenses in order, and you’ve reached full visibility, you can begin to find ways your company can save money and increase the value of what you have in your network.
      • Amplified Value, now that you’ve been able to save money, you can reinvest that money back into your software environment to help it grow.
  • Determine What Processes You Should Implement

It is important to figure out which of the many processes software asset management implements is right for your business. There are a few core processes that gathers vital information into your SAM visibility. According to ITAM Reviews’ An Introduction to Software Asset Management, these processes include:

      • Determining Software Use – Establish what users are permitted to do with the software they have installed on their machines.
      • Software Procurement – How do you properly purchase a new software instance?
      • Software Authorization and Deployment – How is new software requested and what is the process for approval and deployment?
      • Recycling with Starters, Movers, and Leavers – How is software given to new employees? What happens when an employee moves departments or offices? What happens to an employee’s software when they leave the company? How is it redistributed back into your company’s infrastructure?
      • Disaster Recovery – Should an unexpected incident occur, how will critical IT services be maintained until the incident has passed?
      • License Compliance – How does your company determine that license compliance is met and how do you guarantee that non-compliance issues are addressed?
  • Find the Right Tools and People for the Project

The next thing you need is the right equipment to get the job done. When choosing a SAM tool for your company, according to ITAM Reviews’ article: An Introduction to Software Asset Management; as well as conclusions drawn from our own experience, there are many things to consider, such as:

      • A tool won’t give you complete visibility immediately, software asset management is a process
      • Tools can easily apply duplicates, especially if your network has unique naming conventions
      • Tools struggle to account for Cloud Mobility, different License Metrics, or bundled purchases
      • Tools can accidentally mark your test environments as full production deployments
      • Tools are great for inventory data, but they will often fail to account for circumstantial data such as Edition types
      • Check the compatibility of the SAM tool with your environment or any other SAM tools you already have implemented
      • How will the tool impact the user experience, if at all?
      • Is your infrastructure strong enough to support the tool?
      • How does the tool vendor issue updates or patches? How will those changes affect the tool and its performance in your system?
      • How does the tool gather data? Is there any downtime that is experienced as a result of the tool gathering data?
      • Does the tool vendor offer any support?

Ensure that you keep this in mind when purchasing your tool, as often companies with an insufficient SAM tool will resort to either buying another SAM tool or supplementing any missing information manually and both solutions are far from ideal.

Next, you’ll need to find someone who can own the project. SAM is not something that can be simply thrown at procurement,for example. Software Asset Management is a full-time job. You have a few options at your disposal when it comes to hiring the right people:

Hire a Software Asset Management Team

While hiring a team of full-time software asset managers offers you a team that shares your company values, adding to your company’s headcount is expensive in the long run and offers less expertise and diversity of experience than a software licensing consultant.

Third-Party Software License Consultants

Perhaps their expense can seem more costly upfront, but software license consultants bring instant expertise and the ability to scale their team according to your demands. The savings that they can bring to your company can be huge.

Hybrid Solution

This popular option offers the best of both worlds. Companies who opt into this hybrid solution will have their own tools installed onto their network but will outsource the management of it to a software license consultant. This setup is ideal for companies with highly sensitive data or companies who have their day-to-day management under control but would like assistance with a large project such as an audit or a contract renewal.

For more information on the options available to you, check out our article Hire a Software Asset Management Expert or Do it Yourself? The Pros and Cons of Each.

Want to Get Started?

Software Asset Management is quickly becoming an essential element of any strong business strategy.

There are audits to defend against, software licenses to optimize, money to save, and asset management can give you all of that.

Getting a handle on your software estate means less time scrambling for data, less money being wasted by untracked resources, and less of being at the mercy of your software vendors.

At MetrixData 360, we empower our clients with the tools they need to make smart spending decisions when it comes to their software. We have helped hundreds of clients save millions of dollars in their software estate

If you’d like to learn more about how we can get you started on the path to a fully mature Software Asset Management Strategy, check out our SAM as a Service Page. As you begin this journey please remember, you don’t have to do it alone!

Book a Meeting With Your New SAM Expert

5 Ways to Cut Software Licensing Costs

How to Save Money on Your Software Licensing

Software licensing is ridiculously confusing, and its hyper complexity is not slowing down anytime soon. This confusion can easily lead to overspending, which equates to more money in the software vendor’s pockets, taken at the expense of your company’s software budget. How does overspending on software licensing occur and what steps can you take to cut software licensing costs?

At MetrixData360, we have helped hundreds of companies save millions of dollars, so we will show you the steps you can take to mitigate any potential areas of overspending in your software licensing environment.

Have A Clear Life Cycle for Assets

Not having a clear system that retires old assets is one place that is often a source of overspending for many companies. Employees leave the company, but they still have accounts and their old desktops are put in storage, but those old devices are still showing in certain environments as active. These old assets can become a source of artificial inflation for a company’s license requirements.

These retired assets could easily still be visible in your Active Directory, which is where the software auditors will look in the event of an audit. This will make it appear like you owe far more than you actually do while also being quite a drain on your company’s budget.

One of the reasons for this inflation lies in the lack of systemization in place for tracking assets. Old employees drop off their computers to the IT department but new hires head to procurement to ask for new desktops (and the licenses that go along with them).

A lack of proper organization for this process fails to account for the possibility to redeploy licenses and will leave you ill-prepared for both a software audit and a contract renewal.

Having an inventory tool in place will greatly assist in the monitoring of assets, which brings us to our second point.

Have a SAM Tool in Place – and Someone Who Can Read It

Software Asset Management tools are essential if you have a large software estate and you need to keep track of everything that’s deployed. Software Asset Management tools specialize in inventory and licensing, and are an indispensable means to cut software licensing costs.

Demonstrating to your software vendors the systems you have in place to track your software deployment will give you a greater appearance of control.

However, SAM tools cannot grant you instantaneous and easy, always-available visibility into compliance gaps and overspending. Depending on the SAM tool you’ve installed, your SAM tool might struggle with the following:

  • Multiple licensing metrics
  • Detecting development or test products that are not yet in full production
  • Cloud licensing
  • Failure to account for duplicates (they might accidentally count new software and older version of that software that has not been fully removed from your environment)
  • OEM and Retail Boxes Purchases (SAM tools are often confused by such purchases)

Want to know more about where your SAM tools are leaving you open to compliance risks, check out our article Why Do Software Asset Management Tools Stink at Software Asset Management?

All of these complications can leave your SAM tool lacking in some areas, which may make you resort to buying another SAM tool or it will force you to fill in the missing gaps of information manually.

Both these tactics mean you’re wasting time and money on the SAM tool you purchased. That is why it is important to have someone who can actually manage your SAM tools and analyze the data it produces. This can be done through hiring an in-house software asset manager or hiring an external partner.

Don’t Guess Your Projected Usage in Contract Negotiations

If a company does not have a firm grasp of their software usage when their contract is up for renewal they will inaccurately estimate how much they will need.

Due to lack of visibility into requirements, many companies end up licensing simply what their sales reps suggest in contract negotiations, instead of licensing what they actually need. Sales reps have quotas to meet, they are not in the business of saving you money.

Also, make sure that the value of the software that you’re interested in deploying is not outweighed by the cost of maintenance. We’ve seen companies crippled with the cost of running programs where support and maintenance costs continue to grow year after year. If you have a good handle on the software you use, you can also align the cost of maintenance to match your actual usage.

Move to the Cloud Carefully

The Cloud poses a tempting offer for many businesses thanks to its flexibility, its storage capabilities, and its seeming ability to remove the difficulty of managing both the hardware and software on-premises.

Now you need only pay for what you use like a utility bill. It is often the case, however, that companies begin the transition to the Cloud only to stop halfway through because the costs of moving there was much more than the company anticipated.

Unexpected costs come from the following areas when moving to the Cloud:

  • Your department spins up projects without shutting them down after the project has been completed.
  • Everyone in your company is allowed access to your Cloud estate. We once had a client accidentally pay $80,000 in the span of two months because one of their junior IT had turned on an expensive storage option that was collecting data for the whole company.
  • You assume your licenses can be taken to the Cloud when in reality vendors might allow it, they might not or they might allow for only a partial move.
  • You assume your licenses neatly translate to the Cloud when in reality, license metrics behave differently in the Cloud, often in a way that will leave your servers under-licensed and your company exposed to the heavy penalties of an audit.

Having a process in place that controls who has access to your Cloud estate, understanding your expected usage and having a strong understanding of your licenses along with their potential mobility to the Cloud will help to ensure that your transition is a smooth one!

Perform Internal Audits Constantly

Regular upkeep of your software licensing and usage should occur on a monthly or bi-weekly basis. The two main benefits of performing internal software audits are that it reduces the number of inactive licenses in your environment and it ensures your ability to maximize the efficiency of your current licensing position.

It can also help counter many of the issues that crop up due to Cloud migration and data gaps in your SAM tools.

Getting a handle on your data will also allow you to be ready in the event of an audit. Having quality data to challenge the auditor’s findings will be a massive advantage for your company during the auditing process and the settlement that will occur after.


Start Saving on Your Software Licensing

Being able to cut software licensing costs will mean money back into the IT department for smarter and more innovative investments. This can be done by tracking the life cycles of your assets through the successful deployment of an inventory tool (along with someone who can effectively read it), through having a clear understanding of usage during contract negotiations, carefully considering your migration to the Cloud, and by conducting internal audits to ensure compliance.

At Metrixdata360, we can help you cut down your costs to save you from unnecessary drains on your budget and potentially heavy audit penalties. Don’t put off saving money, get your free consultation today!

Software Audit Risk Assessment Checklist

Below is an excerpt from our Software Audit Risk Checklist, which is available as a free download for subscribers to our newsletter. This is the same checklist that we use in our primary assessment of client environments.

Software Audit Risk Checklist


Software audits are considered an unpleasant and inevitable factor of business. Once, it may have been possible for a company to remain compliant with their software vendors with only a few spreadsheets managed by someone extremely organized. Now, however, software deployments and contracts have become so complex that this is simply not practical.

As technology has evolved, the way that software is used and deployed has become more complicated. Software publishers themselves have not made it any easier with their perplexing software contracts that are convoluted and difficult to read. The temptation to skip over the entire document, agree to the terms and conditions, and move on with our days can be irresistible.

Despite how the software vendors may be stacking the situation in their favor, preparation is your greatest tool of defense. In this document we’ll discuss how you can prepare for a software audit.

Understanding the Risks of a Software Audit


Are You Inviting a Software Audit?

Some software vendors will send audit and Software Asset Management (SAM) review requests at random or on an annual basis; such events are unavoidable. While most software vendors will provide little to no criteria for initiating audits, the fact that there are different kinds of audits should be an indicator that not every audit is born from the same kind of evidence or circumstance.

Vendors have discovered that software audits are an excellent source of revenue, especially if their customer’s compliance gap is large enough to force them to cover the cost of the software audit. Software audits can have a high return on investment, making it well worth the software vendor’s time and money. It is towards these safe ROIs that the software vendors will turn their interest.

Therefore, if there are indicators that a company is out of compliance enough to yield a profit, they can risk their vendor initiating the audit. If you are concerned about your company’s exposure to a software audit, below are the risk factors that increase the likelihood of an audit occurring.