Is the CSP the New EA?
Getting ready to renew your Enterprise Agreement with Microsoft? The traditional EA comes with many advantages, mainly allowing businesses to add licenses to their profile throughout the year and only pay for the licenses that they had added during their annual true-up. It cut back on the hassles of bickering with Microsoft over price, but it can often prove the biggest IT expense in many organizations.
In recent years, a new potential alternative has entered the scene. Cloud Solution Providers offer a tempting alternative to EA customers. With so many businesses, moving to the Cloud, having the licensing that matches that migration is critical for your business, but is a CSP right for you?
At Metrixdata360, software licensing is our bread and butter, and we pride ourselves with diving into the nitty gritty details to see where you can cut your software spending and optimize value. Let’s take a closer look at how the Microsoft CSP compares to the Microsoft EA.
Microsoft Cloud Solution Provider
The new CSP licensing model is designed to give large businesses more control over their licensing. Like most of the licensing available on the Cloud, CSP follows a subscription payment system, where you pay a monthly fee to cover only what you have used.
Benefits of Microsoft CSP
- Pricing Flexibility
With the CSP, you pay only for what you need and only for as long as you need it. There are no hefty upfront payments and no lump sum payment that you must commit to yearly like with the EA’s true-up. This also means you will not see any surprise costs throughout the year.
- No minimum number of users or devices
Unlike with the EA, which has a minimum number of users or devices of 500, the CSP is much more flexible with the number of devices and users you can have under this agreement, making it ideal for smaller companies.
- Licensing flexibility
With the EA, we have often seen that companies will bulk up their purchases beyond what they actually need in order to secure a better deal overall but with the CSP, there remains the Cloud Subscription principle of paying only for what you use and what you need.
Unlike with the EA, where you are expected to manage your own licensing, there is additional support available to CSP customers through your CSP provider, which will offer you around-the-clock support.
Disadvantages of Microsoft CSP
- It’s only for the Cloud
This is a bit of a given since it’s a Cloud Solution Provider program, but if your company hasn’t made the transition of moving its business to the Cloud and has no intention of doing so, then you won’t be able to get much value out of the CSP. Microsoft’s CSP is also only for Microsoft’s Public Cloud with Office365, Sharepoint, Skype for Business and other such productivity-centered solutions online, although there is also additional security you can get if the Public Cloud feels too public for you. For your On-prem software, you will need another contract in place in addition to your CSP with Microsoft to account for them.
- With the Cloud comes Cloud Related Problems
Moving your business to the Cloud isn’t the end to your software problems or end to the potential for wasted spending. Some of the most common concerns we see surrounding having your software exclusively on the Cloud are:
- Security: it is a heated debate about whether your data is safer on-prem or on the Cloud. While the most popular platforms are equipped with high quality security, there are the occasional breaches that tend to have terrible effects.
- Soft costs: From our experience, many companies that we have worked with have stopped their Cloud transition half-way through after being nickeled and dimed to death through the accumulation of seemingly small Cloud fees when spread across their entire software architecture.
- Licensing metrics: When moving to the Cloud, many companies often find that their licensing metrics changes and they are left with a few missing licenses, leaving them exposed to compliance issues in their next software audit.
Microsoft Enterprise Agreement
Microsoft’s EA has been a popular solution for many companies throughout the years. Its appeal came from allowing businesses to add licenses to their agreement as they go.
Advantages to the Microsoft EA
- Software Assurance
For companies where mobility to the Cloud simply isn’t an option, the EA remains an appeal because of the software assurance, which offers customers valuable access to upgrades, IT training, and support. These benefits are required for licensing mobility, disaster recovery and can prove a vital asset during a software audit. Many companies consider keeping their Software Assurance as a mission critical priority and for this reason will often take the punch with the changes to their EA, so long as their Software Assurance remains intact.
- Volume Discounts
Microsoft offers a lowering price to their customers who buy in bulk or those who are government and academic organizations. However, this has become steadily more difficult to obtain as Microsoft pushes their customers into the Cloud.
Disadvantages of the Microsoft EA
- Minimum of 500 Users or Devices
In 2016, Microsoft announced that the minimum number of devices to qualify for the EA licenses went from 250 to 500, giving companies with EAs and less than 500 devices a grace period of 36 months before the change was implemented and July of 2019 saw the end of that grace period. What this means is that companies either have to pay for more licenses than they need, or they need to find alternative licensing options.
- Lack of Flexibility
Compared to the CSP, the EA has very little wiggle room that can be adjusted to your unique business model. Don’t want the Software Assurance? Don’t want to sign up for the full three-year term? Don’t have a single company-wide standardized Microsoft product? Want to reduce your Enterprise Products to a number below your initial purchase? You’ll find yourself fresh out of luck.
Trouble Deciding Between Microsoft CSP and Microsoft EA?
With July being the time of true-ups for many companies in an EA with Microsoft, it’s important to consider the options you have at your disposal, unless you’d care to spend the next three years stuck in an arrangement that doesn’t suit your business needs.
At MetrixData 360, we aim to educate our customer base so that they can feel confident that the decisions they make regarding their software will provide the best value for their company. If you’d like to learn more about Microsoft EAs and how MetrixData 360 can help you get the most out of your software licenses, check out our Software Contract Negotiation page.