Filed under: IT Strategic Planning, Microsoft, Negotiations, SaaS, Subscriptions, Total Cost of Ownership
Continuing its direction toward rental-based agreements, Microsoft has recently been ptiching EAP’s and EAI’s to some of its customers.
Simply, these agreements are the “balloon payment, low interest mortgage loan” of the licensing world. They look great right up until the time the balloon payment comes…
Visit http://www.netnetweb.com/blog/entry/new_microsoft_agreements_eap_enrollment_for_application_platform_and_e/ to read the full article.
When evaluating the potential impact of end of support, Clients should consider the stability of their applications, the feasibility and costs for moving to other solutions, and the risks associated with prolonged downtime for the applications.
Filed under: IT Strategic Planning, Microsoft, Negotiations, SaaS, Software, Subscriptions, Total Cost of Ownership | Tags: Microsoft, Microsoft Enterprise Agreement EA ESA Subscription, Software Assurance
In an interesting development which may be useful for many of our Clients, Microsoft has announced the ability to rent its software.
And some great commentary by Mary Jo Foley, here:
This is a new offer, but it’s not really the first ‘rental” deal that Microsoft has offered.
Today, there are several ways to purchase and use Microsoft products:
– “OEM preload” – the typical way that Windows is sold, preloaded by the manufacturer on new PC’s. Microsoft also offers a few other products via OEM, notably the home and small business flavors of Office. This license is a perpetual license for a one-time cost (typically included in the cost of the PC).
– Full package product (“FPP”) or shrinkwrap boxes. Traditional retail packaging, this is a perpetual license for a one-time cost.
– Volume Licensing – via the Open, Select, Enterprise Agreement structures – Microsoft customers can get volume discounts for full, perpetual licenses, and also purchase Software Assurance to cover future upgrades, which then become perpetual rights to the new versions.
– Subscription models – Microsoft offers several “rental” programs via the various contractual structures.
Enterprise Subscription Agreement (most commonly for enterprise customers) or Open Value Subscription for smaller enterprises. These contracts are structured similar to normal volume licensing deals; the main difference is that there is no “perpetual” component to the licensing; when the agreement ends, all rights to the software expire and the customer must remove the code from all the machines covered.
– Various hosted / SaaS options – Microsoft and a large partner community offer online solutions for most of the business products in Microsoft’s portfolio. Recently, Microsoft has made a big push into selling Exchange and SharePoint services via the cloud, under their BPOS (Business Productivity Online Suite) brand umbrella. They have also announced plans to deliver Office and other products under this model. Again, this is a true subscription approach, so no perpetual rights are transferred to the end customer and usage rights terminate with the contract.
– and finally, the new Rental offer, which is interesting in that it allows an owner of a perpetual license to make a one-time purchase, which grants the right to rent the software to other customers.
On first blush, the new Rental rights may be useful in cases where clients need to have temporary usage of a product set on seasonal or project-based needs, where the user count will increase then decrease in a period of less than a year.
Filed under: IT Financial Management, Microsoft, Negotiations, Software, Total Cost of Ownership
Microsoft’s Select and Enterprise Agreements have long provided for a 30-day grace period at the expiration of the Agreement, for customers to decide whether (or not) to renew Software Assurance.
However: In the latest version of Microsoft’s Agreements, the 30-day grace period was eliminated. This now means that Software Assurance must be renewed before the expiration of the enrollment or customers may be required to purchase new licenses to remain in compliance with their Agreements.
The apparent goal of this change is to shift the balance of negotiations power to Microsoft at the time of renewal. Clients should be in a position to make final decisions 90-days prior to Agreement expiration, and the time required for a Client to fully review its Microsoft investments averages 90 days.
As a result, NET(net) now recommends an engagement start date of no less than six months prior to Agreement expiration for Clients to perform an initial assessment of their Microsoft Agreements and/or renewals.
In addition, the Change of Channel Partner (COCP) form for your Large Account Re-Seller (LAR) is also changing. The time between the date a customer signs the COCP and the day the COCP takes effect will increase from 30 to 90 days. This is another good reason why Clients want to be prepared to implement all changes 90-days in advance of Agreement expiration and/or renewal.
With the COCP change, we now recommend that EA customers review their LAR relationships annually, and if dissatisfied, there will be ample time to either remedy the LAR relationship or to change LARs before the next annual True-Up.
NET(net) will help Clients perform Microsoft Investment Optimizations and/or annual LAR evaluations, at least six months prior to Agreement expiration to ensure Clients have enough runway to achieve their Microsoft Investment goals and objectives.
Note- many Clients have annual true-ups in June, so January is a great time to get started.Stay tuned to this blog for more information on how you can make the most of your technology investments.
Filed under: Data Center, IT Financial Management, IT Strategic Planning, Microsoft, Negotiations, Oracle, Outsourcing, Risk Mitigation, SaaS, Software, Subscriptions, Total Cost of Ownership
Microsoft is aggressively discounting its hosted / SaaS solutions in order to gain market share, and I suspect, to sway customers from the EA / Select / perpetual license model, onto the rental / cloud / SaaS model.
Microsoft cuts prices on BPOS, to issue refunds –
Microsoft seeks to lure Salesforce, Oracle users with six months free of CRM Online
Microsoft chops prices of its hosted enterprise cloud offerings
But you’ll note that’s only on the hosted offerings.
Also of note, Microsoft’s huge new billion $ datacenters in Chicago and Dublin are now open for business. With more coming soon.
On the traditional licensing front, Microsoft just announced price increases for SQL Server.
So, clearly, MSFT is betting big chunks of cash on swaying customers to its hosted services, and as a consequence the traditional licensing models are becoming slightly less attractive. I would advise Microsoft customers to consider the true costs and benefits of moving from a traditional licensing approach, to a model such as BPOS. As in most things regarding Microsoft’s sales practices, there are hidden factors that may not come to light unless you ask the right questions.
Filed under: Hardware, Microsoft, Oracle, SaaS, SAP, Software, Subscriptions
There appears to be a significant amount of buzz around Web 2.0, what it is and how do you get some… If you do a Google search on Web 2.0, you are using Web 2.0 technology! Just by the fact you are reviewing this blog post means you are using Web 2.0 technology.
Why would a professional optimization firm write about Web 2.0?
The newest versions of applications, services and hardware touted by companies like IBM, Oracle, Microsoft and others are being sold as Web 2.0 necessities.
So what is Web 2.0?
If you click on some of the results from your “Web 2.0” Google search, many people say Web 2.0 is nothing more than a marketing spin on the natural progression of Internet technology. So why then are Enterprises being encouraged to pay premiums based upon marketing and hype? Continuing a tradition among technologists to buy the latest and alleged to be the greatest? Beyond that, we have no clue! But, we can try to put some context around what is Web 2.0?
Quite simply, one can look at a website or application as being Web 2.0 if it contains any of the following characteristics:
- A user centric customizable interface (i.e. use of widgets to customize pages)
- Community updates like those found in Blogs or Wiki pages
- Uses the Web as its delivery platform and is entirely browser accessible
- Allows for collaboration like that found in Instant Messenger or other Social Networking sites
- Utilizes user generated “Dynamic Content” for updates
- Software as a Service (SaaS) by definition, uses the Web as its delivery platform
- Provides for a rich use experience
Who can argue with those, almost like motherhood and apple pie (all good). Those characteristics are so all encompassing, almost all software fits into at least one of the categories above. Still, by using the latest buzz word and labeling products “Web 2.0”, technology companies are jumping at the opportunity to capitalize on the ambiguous definition of “Web 2.0” and trying to use it to compel buyers to pay a premium to obtain it. At NET(net), we consistently rally against hype and focus on business value received relative to financial investment expended. This is where Web 2.0 falls flat (in our humble opinion).
Filed under: IT Financial Management, IT Strategic Planning, Microsoft, Risk Mitigation, Service & Support, Software, Total Cost of Ownership
Microsoft is entering a period of new product releases; Windows 7 is widely expected to ship in time for Christmas 2009, and Office “14” along with refreshed versions of key products, such as SharePoint, are expected as well in late 2009 or early 2010.
Since many Microsoft customers are evaluating their Microsoft agreements in the next few months, as many Microsoft deals come due at the end of the calendar year, customers are again being asked to pre-pay Microsoft for planned innovations that may or may not ever reach a product release, and when or if they do, may or may not be of interest to customers, who may or may not be able to effect meaningful ROI by upgrading.
Which key product upgrades should customers expect in the next few years? How can customers best optimize Microsoft investments in light of the coming planned upgrade cycles?
NET(net) has researched and summarized the key upcoming product releases so you can effectively plan your organization’s IT rodamap.