Office 365 is one of the first things our clients mention when they talk to us. Its one of the top concerns or challenges that they have and one of the common things that we hear from them is that they are tired of purchasing software or services that they never use. In the world of Office 365 not subscribing to this is a very difficult task based on how Microsoft creates Office 365 bundles and the way they price the product vs the service that they offer.
MetrixData360 has developed an Office 365 Decision Model for you to use to help you determine how best to approach Microsoft depending on three key factors:
Your Unique Business Requirements as they relate to Office 365
Your Actual deployment roadmap of the services (regardless of Office 365 licensing bundles)
Costs of not just licensing but deployments, upgrades etc.
Depending on where you intersect on this simple Venn Diagram will determine what you should do with regards to negotiating an agreement with Microsoft on Office 365. If you fall into the following category (where the circles intersect), the following is our high-level guidance for you:
Office365 costs more than your costs to maintain your current infrastructure. At this junction, you should delay your purchase of Office 365 as you will not have the financial business case and TCO to move forward with a deployment.
You have not determined your roadmap and the timeframes within which you will deploy the components of Office 365. You should not proceed with a purchase of Office 365 (regardless of price) as the months that you do not use the product will cost you more than any savings you may have from pricing.
You are unable to identify any solid business reason to move to Office 365. Deploying to the cloud would not provide the business or your IT organization any added benefit so there is no reason to move forward with a purchase of Office 365.
You have all the requirements necessary to move forward with a negotiation. Go forward and negotiate your best deal with Microsoft.
Microsoft is pushing you to move to their cloud offering yet Microsoft’s offering can be confusing. It’s more important than ever to understand how to efficiently negotiate a winning cloud deal.
Join Mike Austin as he shares his insights and cuts through the confusing jargon with straight talk! Mike Austin has been involved in countless Microsoft negotiations and audits and has negotiated over $1B in software cost reductions.
If you have ever negotiated an Enterprise Agreement with Microsoft you will know that if you hear they are offering something for “Free”, it’s time to start budgeting for future costs.
To take advantage of the free support offer, you’ll need to include Azure Services under an Enterprise Agreement (EA), purchase between May 1, 2016, and June 30, 2017. Or have an active EA during that period.
If you choose not to include support with your Enterprise Agreement, you’ll automatically qualify to receive Azure Standard support at no additional charge. Azure standard support usually carries a price of $300 USD per month. This level of support is recommended for those with “Limited business-critical dependence on Azure” and promises a two-hour response time. This is a seemingly great incentive for organizations looking to perhaps move a few workloads to the cloud but, not ready to move systems critical to business continuity.
If your organization has already made Azure commitments and decided to include standard support (purchased separately from your EA), Microsoft will be bumping you up to the Professional Direct level. Professional Direct support is touted as the “must-have” for those companies that have already made a major Azure commitment and most likely have or project to have a high level of dependence on Azure. Have you moved applications or workloads that are critical for day-to-day business operations? Professional Direct support is a big deal. This support tier usually carries a $1000 USD monthly cost which includes one-hour response times and some included advisory services. For those who signed up for that level, you will get six “App Consulting Services Sessions” in which Microsoft folks will offer “customized one-on-one consultation with a technical expert on a variety of Azure-related topics, such as architecting cloud environments, design and implementation of apps on Azure, and workload deployment.”
Did you see what Microsoft just did there? By offering free support or increased levels of support to organizations at every level of the cloud adoption lifecycle Microsoft is enticing their EA customers to consume more.
For those who might have opted to include Azure in their Enterprise agreements with no intention to deploy but, perhaps received some other benefits or discounts elsewhere in their EA negotiation, they now have a support team to stand behind them as an incentive to just give Azure a try. Similarly, companies that have decided to test or move non-critical workloads to Azure can now move more and include systems with perceived higher risk to Azure feeling secure that they have access to the Top Tier of support should something go wrong. Finally, the inclusion of the App consulting services and customized one on one consultation for those companies that have already formed a dependence on Azure have just given Microsoft’s sales organization a reason to initiate discussions to help you consume more, spend more, become further dependent and entrenched.
There you have it. “The catch” you knew was there but, perhaps couldn’t quite put your finger on it. If your organization is in a position to receive this “free” support offering, by all means, take it and by all means, use it. Just keep in mind the true motives behind this promotion. It’s empowering Microsoft to push just a little bit harder. They will be telling you it’s okay to move forward with cloud initiatives just a little bit quicker. The end game however falls into their favor with rapidly increasing consumption and of course the monetary gains that will undoubtedly go with it.
This is a complex issue and our licensing experts would be happy to have a free consultation with you to see how we can help you.
Unlocking the Mystery: Virtual Desktop Licensing Explained by Industry Experts
Virtual Desktop Infrastructure licensing can be convoluted and confusing! Often organizations believe they are licensed correctly only to discover that they are out of compliance.
Join Mike Austin as he shares his insights and cuts through the confusing jargon with straight talk! Mike Austin has been involved in countless Microsoft negotiations and audits and has negotiated over $1B in software cost reductions.
Trusted globally by some of the world’s most well-known enterprise companies, MetrixData360 is the leading provider of expertise and negotiation services around Enterprise software contracts. Combining an unparalleled knowledge of the DNA that make up software agreements with the ability to understand company’s individual requirements, MetrixData360 is able to drive out significant costs and align agreements to business priorities NOT to those of software vendors and their programmatic objectives. Using technology, process and knowledge derived from the analysis and negotiation of more than a thousand contracts, we help put explanation around the unknowns that create compliance gaps and control spiraling costs associated with Enterprise software agreements.
Our Sean McIntosh was recently interviewed as he is a presenter at the upcoming Compliance Manager Summit where he will discuss how to challenge your audit findings.
Out of every $1 million in noncompliance found in a Microsoft audit, about 50 percent will be wrong, says Sean McIntosh of MetrixData360, a consulting firm specializing helping organizations with license compliance and audits.
And the worst part is that a lot of companies won’t even argue effectively.
“Some people, when they get a call from a vendor, assume they have basically no rights,” says McIntosh, a featured presenter at the 2017 Compliance Manager Summit (March 13-14 in San Francisco). “Often, when software auditors throw a lot of legal terms and conditions around, companies will just cave in, turn over their data, and pay up.”
But this is changing. More companies are challenging their audit findings, negotiating better settlements, and pushing back.
McIntosh is an expert on the tactics and grey areas that software vendors of all kinds (and their auditors) use today to drive up the cost of compliance settlements. Although he’ll go into detail at his Compliance Manager Summit session, here are a few key points.
Know the rules
“It really doesn’t matter what software vendor your dealing with because they all follow a very similar approach to audits,” says McIntosh. “They put a data request in and compare that data against their entitlement data and find the gap—the largest gap possible by applying the most conservative rules possible.” However, the first thing you should do, says McIntosh, is go back and read the contract that you signed to confirm what your rights actually are. Know exactly what data you have to turn over, how many licenses you purchased, and a host of other terms you agreed to that may enable you to lessen some of those gaps.
For example, in one audit that McIntosh worked on with a client, he found that Microsoft was applying the most current product rights and conditions, but the actual application in use was a few versions older. “When the current product use rights were applied to their SQL Server licenses the initial gap was upwards of $2 million. But when we applied the correct usage rights—the ones assigned at the time of the license agreement—their gap was really around $500K.”
Microsoft auditors will always try to impose the most current usage rights because they are almost always the strictest. “The company was within their legal rights to follow an older version of usage specifications, but it still took a lot of arguing with the auditors,” McIntosh says.
Know your own data
Although companies often will just turn over usage data (or access to usage data) to software compliance auditors, McIntosh says, not so fast!
“When you get involved with one of the boutique auditors hired by Microsoft, make sure you get an nondisclosure agreement in place that allows you to review any and all data the auditor plans to send on to Microsoft,” McIntosh cautions.
The reasons you want a data review are many, but generally you want a chance to explain any abnormalities and offer proof to the contrary, says McIntosh. “There can be a lot of technical errors in the first pull of your data, that, if Microsoft gets a stab at it they will forecast an audit finding base on it. So it’s important to work with the auditor to find simple and easily explained anomalies, supply the data to back up your story, and remove these from the final data submitted on to Microsoft.”
For example, another MetrixData360 client owned the rights to 500 copies of Microsoft Office Professional that they were not using. The client had installed 500 copies of Office Standard that they did not have entitlements for. “In a situation like this the auditor will demand that the company buy 500 copies of Office Standard, which is technically correct, but that’s not the way it really works in most cases,” says McIntosh. “In a negotiation, you can fairly quickly get that auditor to accept the licenses for Pro in place of Standard.”
Escalate above the auditors
Another tip McIntosh has for companies as a last resort to challenge their audit findings is to go over the auditor directly to the software vendor.
Okay, did I catch your attention with that title? Let me set the record straight. No, I don’t think Microsoft will fail anytime soon. Sometimes, as I’m thinking about the business or deals that I am working on, I often wonder what is going on behind the scenes at Microsoft and why they make certain decisions? In this post I’m going to try and answer some of the top questions that people ask me around why Microsoft makes some of the decisions that they do.
Why the Push to Office 365?
On the surface the answer to this question seems simple. Microsoft wants to control your infrastructure; they want to make sure you are hooked… but I really don’t think it was this simple internally at Microsoft. My guess is, there was a massive amount of real debate about a push to Office 365 (and I’m guessing it was not always a polite conversation).
Office 365 to me, was an answer to a problem Microsoft has had since the invention of Software Assurance, it was a way to force customers to upgrade. The biggest threat Microsoft has to its traditional recurring (ie. Software Assurance) revenue stream, is clients that do not renew (all or part) of the Enterprise Agreement (EA).
If you really think about it, Exchange as an online service – makes sense. SharePoint as an online service – only sort of make sense (think of all the customization that may not be easily achieved in a multi-tenant type deployment), Skype in the cloud – not sure it makes sense (ok I will give IM and presence, but Voice? I’m still not sure VOIP quality comes close to the landline) but Office in the cloud – huh? Yes they have the Office Apps but are they really much more than a glorified viewer (which were free?).
I think just looking at Office pretty much provides the full picture here. People were dropping the SA on Office, as they only deploy the product every 6 or so years. Microsoft realized this and the natural answer – push people to Office365 and make it dependent on a new version of Office. Now at this point I can see someone in the product team in Seattle going AND OH if we make a new version of Office we can force those updates on people.
Why the Push to Upgrade?
Upgrades have always been the nemesis of Microsoft. It started with Windows XP (no I don’t want to get into arguments about how bad Vista really was). No one wanted to move. Microsoft of course never understood this. I always love the comments you hear from sales reps, this customer moved in 90 days why can’t you?
Taking the clients view on this, I truly see it. Honestly, what value can they add into Windows or Office for that matter to provide business value to do the upgrade. I sometimes wonder how many people would still be running Windows XP if it was still supported, which by the way is the number one reason people upgrade these two products – end of life support! Not a good reason in my opinion (completely off topic but, if anyone from Rimini or Spinnaker reads this, please, please, PLEASE!! take on Microsoft support).
I think Microsoft’s issue has always been that, they do not see the clients’ world. Their view is so myopic of their own desires they can’t see it. The reason people can’t move (beyond finding business value) is the cost to do all the application compatibility is so cost prohibitive. End of story. Microsoft’s first attempt at address this – App-V. Virtualize guys, contain the old apps in an image and your good to go. When that didn’t work, they came up with plan B. Force it on them with Office 365.
Not a bad plan if you are a shareholder of Microsoft’s. Get them and keep them forever. The problem is, I don’t believe this plan will work. As much as Microsoft technology is important to people, I do think some unforeseen force will catch them (maybe it’s Google or Amazon or someone we haven’t seen yet) The problem for Microsoft and why I think they will fail is….. They are upsetting all their clients. Organizations are tired of the Microsoft games (Pushing products that aren’t needed into bundles and increasing prices, not negotiating in good faith, auditing and pushing unfair findings on them, etc). Eventually when someone catches them, I think the exodus could be fast. Just ask Novell (remember Netware), IBM (bye, bye Lotus Notes), Corel (WordPerfect) Perhaps someone should ask the crew from Netscape or Blackberry what happens when you take clients and your dominance for granted.
On July 1st 2016 Microsoft announced a new licensing program called Enterprise Advantage and Richard Smith who is the General Manager, Microsoft Worldwide Licensing & Pricing had this to say:
“In 2017, we will introduce Enterprise Advantage as a new way for commercial customers to buy organization-wide on the Microsoft Products and Services Agreement (MPSA). Enterprise Advantage brings traditional Enterprise Agreement benefits to the MPSA and provides the best value for a three-year, organization-wide and optional platform-wide purchase:
Mix perpetual and subscription software with cloud services like Office 365, Azure, and CRM Online, organization-wide
Purchase any time, whatever you need, with no additional enrollments
Enjoy budget predictability and price protection
Buy how you want, taking advantage of your combined purchases across the organization to maximize value
But Why is Microsoft Suddenly Making these licensing changes?
Less room for negotiation for smaller organizations in the sub 2,400 users/devices space.
With the new Enterprise Advantage program Microsoft is making licensing much more programmatic for these smaller to mid-sized organizations. This means there will be less room for negotiation. Our sense is that with the new agreement the MPSA price is the price and there is little to no room for negotiation.
Reduces negotiation around terms and conditions.
With the elimination of the traditional contract stack and its “simplification” there will be less room to negotiate specific terms and conditions which are important to the client’s business. With the MPSA program the terms and conditions are basically a take it or leave it proposition.
Reduce Microsoft’s administrative Costs.
There are administrative costs associated with these licensing programs. Over the last decade Microsoft has become more and more hands on with all their enterprise class agreements and there are costs associated with this. Organizations with less than 500 users will find themselves pushed to a Cloud Solution Provider (CSP). The Microsoft Cloud Agreement (MCA) program’s lack of complexity in terms of customization will help Microsoft push the workload to their CPS Partners. These partners will wind up assuming more and more of the support and administration costs is our guess.
It potentially provides the illusion of choice to clients in the 500 to 2,400 user space.
At first glance it looks like an organization in the 500 to 2,400 user space retains a lot of the options they always have enjoyed with the MSP, EA or CSP. The problem is that the only space in which there will likely be any customization is in the EA.
We’re not sure this makes Microsoft licensing any less complex. In fact, it potentially adds to the complexity. What it does is make it easier for Microsoft to make clients in the 250 to 2400 user space very programmatic and removes any ability to negotiate T&C’s and pricing. Microsoft will then use the CSP program to drive these clients to the cloud.
If you have questions or concerns about the impact of this change, we encourage you to contact one of our unbiased licensing experts for a free initial consultation.
Navigating the Oil Price Plunge: How MetrixData360 Helps Petroleum Industry Save Millions on Microsoft Licensing Costs
The plunge in oil prices has put any IT spending under unprecedented scrutiny and IT departments under the gun to deliver more with less. All organizations involved in the petroleum industry have been faced with major project delays/cancellations and significant layoffs/downsizing. During this downturn every dollar saved is important and MetrixData360 helps save our clients millions. MetrixData360 specializes in to controlling and reducing Microsoft licensing costs.
Mike Austin, Vice President of Service Delivery at MetrixData360 will share his knowledge and insights from over 15 years of Microsoft licensing including over 8 years of employment by Microsoft in a variety of licensing related roles.
You will learn: Can you really downsize your Microsoft licensing footprint due to layoffs? Can you change your Microsoft contact mid-term or do you need to wait for the renewal date? What are the risks of dropping Software Assurance and not renewing an EA? If you are at risk of a software audit due to the Petroleum downturn!
This presentation will provide you with key insights to: Avoid overbuying Microsoft licenses, reduce your Microsoft licensing costs and ensure software licensing compliance.
If you still have questions regarding controlling and reducing licensing costs, reach out to us and we’ll get back to you within 24 hours.
Last year Microsoft removed “transitions” from the EA language last year and has now closed the final loophole.
If you have questions or concerns about the impact of this change, we encourage you to contact one of our unbiased licensing experts for a free initial consultation.
Cookie Consent
To provide you with the best experience, we use cookies to store and/or access device information.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
