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

More easily manage your assets, including true-up and true-down of subscriptions and services, to meet ever-changing businessneeds.  https://blogs.technet.microsoft.com/volume-licensing/2016/07/01/introducing-enterprise-advantage-on-mpsa/

Microsoft’s Mark Nowlan added that:

“With MPSA, Microsoft’s goal is to streamline its multiple licensing/purchase agreements down to a single agreement and two options to buy (transactional/buy as you need or organizational-wide), Nowlan said. As part of this consolidation, the Perpetual Desktop Enrollment, Subscription Desktop Enrollment, and Server and Cloud Enrollments will go away.”  http://www.zdnet.com/article/microsoft-to-add-enterprise-advantage-to-mpsa-licensing-in-early-2017/

 But Why is Microsoft Suddenly Making these licensing changes?

  1. 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.

  1. 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.

  1. 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.

  1. 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.

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