Cut through Microsoft licensing complexity

Practical IT Research that Drives Measurable Results

Cut Through Microsoft Licensing Complexity to
Negotiate a Better Deal

Info-Tech Research Group 1

With millions spent on Microsoft software annually, most
companies are overspending on licenses

Microsoft has multiple licensing options to provide flexibility for various sizes of
organizations, commitment levels, and product usage. This adds greatly to the
complexity, causing many companies to buy into the wrong program.

This research is designed for:
 Executives and line-of-business managers responsible for negotiating and
managing software licenses.
 Software asset managers needing to familiarize themselves with Microsoft
licensing.
This research will provide you with the tools you need to:

 Create a technology roadmap.
 Build a business case to keep or discontinue Software Assurance.
 Make an informed decision about license acquisition options.
 Be well prepared for your license negotiation.
 Know that you are spending appropriately for your needs.
 Choose a Microsoft reseller and negotiate the deal.


Executive Summary

Less than half of surveyed companies purchasing Microsoft software spend significant
efforts to prepare for software negotiations. With Microsoft comprising more than 50%
of a company’s software budget, this could be leaving considerable money on the table.

• Proper preparation including a technical roadmap, vendor research and license
program comparisons are the highest contributing factors to the success of a
Microsoft negotiation.
• Assignment of a dedicated license administrator is key to continued success.
• Successfully negotiating Microsoft licensing programs requires a balance of
knowledge of product usage, product use rights, Software Assurance and license
agreements, which is often provided by resellers on an ask-only basis.
• Value Added (VAR) and Large Account Resellers (LAR) do not always tell you
what you need to know to negotiate a better license agreement and might just
respond with, “Sorry, this is the best I can do,” when you are looking for areas of
savings.
• Price is not the only area where you can save money – it really comes down to
buying the right products in the right program.


Prepare the essential information to place yourself in the
driver’s seat when negotiating a licensing deal
• The efforts required to prepare for your Microsoft purchase should increase
proportionally with the size and complexity of your requirements.
• A formalized process will ensure information is readily available to negotiate
contracts, but may prove to be excessive if purchasing a few licenses through a
non-contract program.
• In either case, documenting the thought process and cost justifications for your
decision will greatly help when renewing agreements and planning your next
purchases.

Non-contract Contract Tasks that will contribute to your license negotiation success

  Roadmap including Anticipated Growth Rate

  Product Use Rights

  License Program(s) Decision

  ROI Calculator for Software Assurance Benefits

 Acquire and read contract

  Choose vendor and negotiate your deal


Create Analyze Calculate the Decide which Negotiate
technology product value of license and manage
roadmap licenses to Software program will your
find the most Assurance to suit your agreement
cost effective your company needs
solution

1
1 2 3 4 5

Next Section in Brief

• Create a roadmap to develop a clear understanding of how your
technology requirements align with Microsoft’s upgrade paths.
• View technical requirements holistically to recognize, and plan for
product dependencies.
• Understand how to license, to optimize software spend.

Organizations that spend more effort creating a technology
roadmap achieve greater MS licensing strategy success

Microsoft licensing success is most
readily achieved by first creating a
technology roadmap

The technology roadmap:
• Documents previous upgrade paths for
analysis of past behaviors
• Identifies critical technologies and gaps
and helps to align with business strategy
• Identifies interdependencies of products
(see appendix for partial list)

The MS licensing strategy success was calculated by
Use the roadmap to:
taking the average of the satisfaction with the • Compare Microsoft’s technology path with
following items: yours to see what software releases will
 Microsoft eLicense site & sales support
 MS S/WA benefits use and adoption benefit your organization
 Vendor knowledge & support • Extend the use of the technology roadmap
 Ease of license management
 Ease of budgeting to aid in budget planning, resource planning
 Comfort level with software spend and education mapping

Use the technology roadmap to provide the base for all
discussions around Microsoft licensing

Review your technology requirements:
• What tools are currently in place and are they providing
a poor, adequate or strong solution?
• What problems need to be solved?
• Can existing tools be upgraded, enhanced or reused to
resolve issues?
• Can the problems be resolved by adding onto current
infrastructure, or is it time to analyze alternatives?
• What is the cost of managing your current
environment, will tighter integration of products
help, or create greater expenses?
• Should the current infrastructure remain in-house or
be partially or fully hosted?
These are all questions that must be answered while
creating the roadmap and preparing for Microsoft
negotiations.


Complete Info-Tech’s Roadmap tool to compare your upgrade
plans to Microsoft’s roadmap
• Review strategy and appropriate technology alternatives to satisfy critical
planning and budgetary needs

The Info-Tech Microsoft Technology
Roadmap tool will help you:

1. Document and analyze past and
future upgrade paths.
2. Understand which products
should be included in your
Microsoft agreement.
3. Provide a starting point for
training and deployment
planning.

“ If you prepare properly, know the roadmap and your strategic plan, you should be able to
manage these expectations easily so you never overspend, especially holding an SA when it is
of no value!
~ Director, Travel Industry
”

technology product Value of license and manage
Roadmap licenses to Software program will your
solution

1 2 3 4 5


• Expand on the roadmap by using the Product Use Rights to correctly
license products.
• Know which licenses will save money on virtualization and productivity
tools.
• Compare product license options to find the right solution.

Consult the Microsoft Product Use Rights to align product usage
with licensing rights & obligations
• Expand the roadmap data to include correct product licensing based
on Microsoft’s “Product Use Rights (PUR)” guide.
• Responsibility for reading, understanding and installing according to
the Microsoft PUR belongs to your Software Asset Management Team
and CIO.
• Use the PUR to plan and budget for upgrades or implementation of
new technology, ensuring licensing rules are accurately reflected in
your plan.
• Beware of changes to product use rights. Often changes are made
when new versions are released or to accommodate technology
changes, such as adding VDI to Windows Software Assurance (July 1,
2010).

Use Microsoft’s “Build a Customized Product Use Rights Document” to customize a PUR

Info-Tech Insight:
Anti-piracy organizations, such as BSA or SIIA, fine companies as much as 3 times the retail price
times the number of unlicensed installations when they determine a company is out of
compliance. Additional criminal charges and copyright suits may follow in certain circumstances.


Applications: Decide which products will be upgraded and
deployed, and plan for alignment with Product Use Rights

PUR Licensing Basics:
• Extend use of applications such as • Office 2010 suites and
Microsoft Office 2010 to the Web and individual applications are
handheld devices.
licensed per device and can
• Use roaming use rights, now available be downgraded (exception:
through Software Assurance, to make
virtualization of applications less costly and OEM & FPP).
more flexible. • Portable Device rights
• Ensure appropriate edition is deployed to extended to primary user on
spend only what is needed, for example; a second computer.
Project Professional used where Standard
would be appropriate would be an • Work At Home (WAH) rights
unnecessary expense. Use our survey apply to primary user of
questions for Visio and Project to choose software.
the right edition for the job. • Exceptions apply to mapping
and development software.

Info-Tech Research Article:
If considering options of whether or not to upgrade to Office 2010, see Info-Tech’s Storyboards:
Make the Decision to Upgrade to Microsoft Office 2010 and Investigate Alternative Office Suites


An engineering firm overspent by 40% on Project & Visio licenses
by not matching product use to the right edition
In an attempt to find money on the software budget before the next upgrade, an
engineering company surveyed 260 project managers deployed in the field, all
licensed without Software Assurance for Project Professional and Visio Professional
through the Select (level A) program.
A customized Info-Tech survey was completed with results showing the majority of users
needing the capabilities of Standard editions with a small group requiring Professional.
Savings of $142,212 could have been achieved by better understanding product usage
requirements.

Product Unit Original Original New Qty New Ext.
Price Qty Ext. Price Price
Project Standard $533 240 $127,920
Project Professional $889 260 $231,140 20 $17,780
Visio Standard $207 228 $47,196
Visio Professional $456 260 $118,560 32 $14,592

Total Spend $349,700 $207,488

When upgrading to 2010 versions, they will use the survey data to prevent a second overspend.
(survey questions for v.2010 are listed in the appendix)

Desktop Operating System: Buy the best option of Windows O/S
to match your IT Team’s upgrade strategy

• Upgrade to Windows Professional 7 for PUR Licensing Basics:
faster processing, choice of 32-bit or 64-bit • Windows base license is
available as retail (FPP) or
and new user interface.
OEM.
• Purchase Windows 7 Ultimate as a retail • OEM Windows is included on
upgrade or OEM install if planning to use all tier 1 computers.
Bitlocker and Bitlocker-to-go for hard drive • Upgrades from Windows XP
encryption. Pro or Vista are best purchased
• Add Microsoft Desktop Optimization Pack through licensing programs.
(MDOP) to Software Assurance for • Licenses can be downgraded to
deployment, management and asset Windows Vista or XP Pro if
management tools (see appendix for more needed.
information on MDOP). • Licenses (not FPP or OEM)
permit use of reimaging
~continued on next slide~ software for image distribution.
For additional information on Windows options and desktop encryption, see Info-Tech’s
Storyboards Plan, Select and Deploy Windows 7 the Right Way, Mobile Policy: security from a
data perspective , and Essential Strategies for Laptop Encryption.


Add Software Assurance to upgrade Windows Pro 7 to Enterprise
7 to gain search, security, and virtualization features

DirectAccess Provides secure network access to mobile users without VPN,
remote access for IT support and authentication.
BranchCache: Provides secure, permission-based, local caching of intranet sites
and files on either PCs or local servers for faster access at branch
locations.
Federated Search Advanced desktop search technology, using OpenSearch, and
ability for administrators to populate links on the start menu.
BitLocker and Data protection on mobile devices as well as USB storage devices
BitLocker to go* using encryption and password protection.
AppLocker Rule-based structure to prevent unauthorized apps from being
installed, while still allowing flexibility for scripts and updates to
install on approved applications.
Multilingual user Create a single image for worldwide deployment.
interface
Virtual Desktop Access virtual desktops on PCs or remotely access virtual
Infrastructure (VDI) desktops from third-party devices.

* Also available in Windows Ultimate through OEM

Servers: Save 18-50% by carefully configuring server licenses
during virtualization and implementation
PUR Licensing Basics:
• Reassess server licenses during virtualization to • Server or Processor licenses are
reduce total server costs, for example 8 Windows required for each physical & virtual
Standard Servers will cost $10,104 where a installations
DataCenter license with 8 instances will only • Web Servers, External Connectors
cost $4,182. and Processor licenses do not require
Client Access Licenses (CALs)
• Carefully assess the value of Enterprise add-on
CALs, such as Exchange Enterprise; does the • Server licenses require either User or
Device CALs, which must match or
extra price justify the extra features? Will the be higher than the server version
features save money by replacing other tools or
• User CALs are most cost effective for
cost extra when a lower priced alternative would users with multiple devices
do? • Device CALs are most cost effective
• Reassess products with per Processor or for devices with multiple users

Server/CAL license options to find significant • Some products have role-based CALs
cost savings as noted in the next two case such as SCCM or Dynamics CRM or
studies. add-on CALs providing additional
functionality such as Exchange
Enterprise CALs
Server specific research can be found at Exchange 2010 Upgrade, What’s new in Exchange
2010, Infrastructure Impact of Exchange 2010, SharePoint for ECM, Dynamics CRM, Windows
2008, Server Virtualization

*US Enterprise level-A 3 year pricing

32% savings on SQL licenses for this manufacturing company
were easily found through a license assessment
A manufacturing company was running SQL on several servers and had
plans to consolidate and upgrade servers and extend the SQL based
applications out to a larger audience of users. As the licenses were not
consistently covered under Software Assurance, new licenses were
required for most of the servers.
The existing license configurations were analyzed to determine the most cost
effective method of licensing SQL moving forward. The Server/CAL configuration
was $94,828 less expensive than the Processor configuration.

Processor Configuration
SQL Enterprise x 4 @ $22,856
SQL Standard x 38 @ $5,347
Total $294,610

Server / CAL Configuration
SQL Enterprise Server x 2 @ $8,007
SQL Standard Server x 38 @ $836
SQL CALs x 1000 @ $152
Total $199,782
Info-Tech Research Group *Select Level A Pricing 16

Analysis of SQL licenses for this healthcare organization showed
savings of 46%
A healthcare facility was looking to license SQL Servers and CALs under a
new Select Agreement to replace their Subscription agreement. Their
Large Account Reseller provided a quote to license all users with CALs
and all servers with server licenses. Their servers were all dual processor.

An assessment compared the Server/CAL and Processor licensing models. The
Server/CAL configuration was $197,792 more expensive than the Processor
configuration.

Server / CAL Configuration
SQL Standard Server x 32 @ $557
SQL CALs x 4000 @ $102
Total $425,824

Processor Configuration
SQL Standard x 64 @ $3,563
Total $228,032

Info-Tech Research Group *Select Canadian (Proposed) Healthcare Pricing 17

solution

1 2 3 4 5


• Learn the benefits of Software Assurance.

• Calculate the value of Software Assurance to your organization.

Consult your roadmap to see whether Software Assurance
benefits will help you reach your technology goals
Software Assurance benefits vary for each product pool and licensing program.
Benefits will increase with larger quantities and stronger commitments to
Microsoft platforms for example: Office & Windows vs. Office only.
Applications Desktop Operating Server
Pool System Pool Pool

Upgrades   
Step Up Upgrades  Win Enterprise 
eLearning   
Training   
Home Use Program 
Packaged Services  
Employee Purchase Program 
24 x 7 Problem Resolution Support   
Technet Subscription Services   
Extended Hotfix Support   
(with premier support package)
Roaming Use Rights   
Multi-language Packs   
Virtualization  


Determine what you are getting or giving up in meeting your
goals with Software Assurance before signing your agreement
• Receive more support from with Microsoft Software Assurance through
training, technical support, deployment planning and account management
over agreements that include license only.
• Plan ahead for features and enhancements available through Software
Assurance that will enable your IT Team to reach their technology goals, for
example, our survey respondents noted a significant change of importance of
desktop virtualization before and after signing their agreement.
High
High

Importance of Virtualization Benefits
MS Licensing Strategy Success

Low
Microsoft Assurance in Place Low Time of Signing Agreement
N = 140 N = 89
The MS licensing strategy success was calculated by taking the average of the following items:
Microsoft eLicense site & sales support Ease of license management
MS SA benefits use and adoption Ease of budgeting
Info-Tech Research Group Vendor knowledge & support 20
Comfort level with software spend

Map Software Assurance benefits to your technology roadmap to
build your business case for or against SA

• The main deciding factor in choosing the appropriate program is to determine
if Software Assurance is right for your company.
• Two obvious benefits are access to upgrades and management simplification.
However, these need to be weighed with other benefits and against the final
cost.

The Info-Tech ROI Calculator for Software
Assurance Benefits will help you:
1.Review benefits and analyze how they will
be used within your organization.
2.Understand which benefits can be traded
up to increase value even more.
3.Quantify benefits to build your business
case for or against Software Assurance.


solution

1 3 4 4 5


Learn the options for:
• License without Software Assurance.
• License with Software Assurance.
• Alternatives and additions to traditional license programs.

Know your license & Software Assurance needs to
choose your Microsoft purchasing program

Start

“ Price is certainlybest for the best price.understanding of the license models is ”
essential to get
a major concern, but
~ Manufacturing Manager

Avoid OEM & Retail purchases to circumvent complications with
asset management & mass deployment
Original Equipment Manufacturer (OEM) and Full Packaged Product (Retail) licenses do not
appear on Microsoft reports and will require manual license tracking. In addition, multiple
serial numbers will need to be managed and products cannot be installed using mass
deployment tools.

OEM FPP Licensing
Windows Desktop Different versions of software than Flexibility of multiple license
Operating System is what is offered through licensing, types, back versioning and
mandatory on most for example Office Professional software assurance
machines and is the only includes less modules as a retail
OEM you should buy package than the Pro Plus version
available through licensing
Single price level, high Single price level, highest Multiple discount options
Single install, no virtualization Single install, no virtualization Portable Use Rights, Roaming and
rights rights Virtualization capabilities

Single use serial number Single use serial number Multiple installs with single serial
number

Install is tied directly to the Install can be transferred to a new elicense, media download,
machine and cannot be machine, but may need to contact transfer rights to new machine or
transferred to another Microsoft for new serial number alternate company (restrictions apply)


Receive volume discounts for license without Software Assurance
based on the size of your purchase
There is no magic to the discounts in license-only programs. The more you buy, the lower the
unit price. SA benefits through these programs are minimal, so do not use if buying SA.

Good Better Best

5-249 Users 250-749 Users 750+ Select Plus
Open Business Open License C
Minimum Buy-in 5 licenses 500 points* 500 points* per year
for 3 years
Agreement term & 2 years 2 years No expiry
type Transactional Transactional Contract
New Licenses Purchased when Purchased when Purchased when
installed installed installed
Source Any Microsoft Any Microsoft Large Account
resellers resellers Resellers
Standard Discounts Lowest volume Medium volume Highest volume
discount discount discount
Extra Discounts Tiered discounting for
higher quantities
*See appendix for more detail on points & programs


A manufacturing company saves money by purchasing license
only and rejecting Software Assurance

Environment:
• A small manufacturing company is replacing 100 desktops over next three
years with no plans for virtualization.

• Uses a heterogeneous server environment with plans to upgrade server software
during the virtualization project which includes replacement of hardware.
• Uses a combination of Office Standard and Professional Plus for most users and
other desktop applications sporadically, as standalone installations with minimal
file sharing.

Recommended Plan of Action:
• Purchase Windows Professional 7 OEM on the new machines.
• Purchase new server licenses as either Enterprise or DataCenter versions to allow
installation of one physical and four or more virtual copies on each machine through
Open Business program.
• Purchase Office and other applications through Open Business.


Not all License with Software Assurance programs are offered by
all vendors; choose the one that’s right for you, not them!
The more you buy, the lower the unit price. Additional discounts apply to the Open
programs for licensing all eligible computers “Company Wide” and buying from more than
one product “Platform”, for example Office and Windows, but you often have to ask for
them!

Good Better Best

5-249 Users 250-749 Users 250+
Open Volume Open Volume C Enterprise
Minimum Buy-in 5 licenses 250 licenses 250 licenses

Agreement term & 3 years 3 years 3 years
type Transactional Transactional Contract
New Licenses Purchased when Purchased when Purchased in annual
installed installed true-up
Source Any Microsoft Value Added Resellers Large Account
resellers Resellers
Standard Discounts Better than Open Better than Open Best Discounting
Business Volume
Extra Discounts Company Wide & Company Wide & Tiered discounting for
Platform Platform higher quantities
Info-Tech Research Group *See appendix for more detail 27

A transportation company reaps great rewards by purchasing
licenses with Software Assurance
Environment:
• A transportation company with 185 users is ready to renew their software
assurance through their Open License program.
• They are currently running Windows 2003 and Exchange 2003 servers and
CALs, Office 2007 and Windows XP.
• Over the next two years they plan to implement Unified Communications, Forefront security
and SharePoint as well as upgrade users to Office 2010 and Windows 7.
• Their education plan includes eLearning for users on the new desktop software as well as
classroom training for the technical team on the new versions of server software.
• Their growth plan during the next 24 months will increase the user count to 350 users.

Recommended Plan of Action:
• After completing a Software Assurance benefits analysis, the customer determines that SA
will be of value to their organization.
• Although they do not have the 250 user minimum, they are willing to buy 250 as they will
reach that number within less than a year.
• They will sign an Enterprise agreement with a single desktop price including Enterprise
CALs, Office Professional and Windows 7 Enterprise.
• Their estimated spend is $145,000 with value of licenses and other benefits over $200,000.

Gain flexibility with license programs by adding alternative
programs for hosting or temporary use licenses
Use these license agreements alone or in combination with Open or Enterprise
agreements to add flexibility to your licensing portfolio.
Subscription BPOS APA
Minimum Buy-in 5 licenses (Open) 250 licenses 250 licenses
250 licenses
(Enterprise)
Installation In-house Microsoft hosted Microsoft hosted
Agreement term 3 years, extend to 6 1 year, or matched to 3 years, extend to 6
agreement if more
than one are in place
New Licenses Annual true-up or Monthly usage True-up at end of
true-down agreement term
Source Any reseller (Open) BPOS authorized Large Account
Large Account Resellers Resellers
Reseller (Enterprise)
Standard Discounts Approx. 20% less than Price set at beginning
license and SA price of contract
Extra Discounts Tiered discounting
based on quantity …more information on each program to follow

Info-Tech Research Group *See appendix for more detail 29

Microsoft’s Subscription model is optimal in very few scenarios
and may increase costs in the long term
The owner of a mid-sized company is planning for retirement and his succession
plan is to sell the company within three years. The business is cyclical with
employee count fluctuating throughout the year. The subscription allows them to
resolve compliance issues, stay current , see an annual increase or decrease in
license usage and save money over an enterprise agreement.
Product Enterprise Subscription

Qty Unit $ Ext. $ Qty Unit $ Ext. $
Office Pro Plus 250 $228 $57,000 250 $163 $40,750
Core CAL 250 $84 $21,000 250 $55 $13,750
Windows Enterprise 250 $66 $16,500 250 $70 $17,500
Totals per year $94,500 $72,000

However, if circumstances changed and it was desirable to stabilize the asset
inventory and stop paying for Software Assurance benefits, the costs to buy-out
licenses would immediately out-weigh the short term savings. A better alternative
might be Microsoft’s SaaS solution: Office 365.
*pricing based on US Open Value Subscription / More information on Subscription can be found in the appendix


Employ Microsoft’s Office 365 Suite to reduce overhead &
maintenance, and increase speed to market
• Employ Microsoft server applications on-line to outsource patch management,
maintenance, multi-layered security, and storage.
• Gain savings over hardware, storage and energy use with predictable, monthly
fees based on actual product usage.
• Employ new features and functionality immediately upon their release, with
updates released every 1-2 months (see appendix for roadmap).
• Provision for unexpected or planned traffic bursts by quickly scaling up virtual
servers; for example, a pizza company uses the Azure platform to handle extra
business on Super Bowl weekend.
• Use Office 365 for fast deployment of mobile or remote workforce or to
accommodate fast growth.
• Combine Office 365 with existing license programs or purchase through a user
subscription license.
• Shift accounting practices from capital to operating expenses.

Info-Tech Insight:
Microsoft’s server farms are located in the United States and are therefore covered by the US
Patriot Act. There may be instances where this will create privacy concerns for non-US
organizations.


Take advantage of the flexibility to Microsoft Office 365 to
replace or enhance your existing infrastructure

• Replace some or all on-premise infrastructure, Are the cloud products as
redirecting resources to work on line of business robust as internally hosted
processes rather than maintaining basic applications?
infrastructure; for example, the communications It varies by product based on
infrastructure consisting of Exchange, Office maturity of the online solution:
Communicator, Live Meeting and BlackBerry • Exchange online is close to
portal can all be hosted with administration parity.
consisting only of add, remove and changing of
• SharePoint online currently
users.
has less functionality.
• Enhance existing infrastructure by separating
• Live Meeting has more
business units or geographic locations into on-
functionality in the cloud.
premise and hosted applications; for example, a
corporate office may use on-premise servers for • Office 2010 includes slightly
all infrastructure with hosted solutions for retail different capabilities between
locations or satellite offices. the rich client, Web client and
mobile device, but doesn’t
• Watch for InTune, a Microsoft solution providing change the integrity of the
cloud-based management and security document when all 3 are used.
capabilities for Windows 7, currently in Beta.
~ as of September 2010


Enroll in Microsoft’s Application Platform Agreement (APA) to
gain unlimited server deployment rights for 3 years

• Use the APA to gain predictable costs for APA includes the following
applications which may include portal, service products:
orchestration, business intelligence and
management and the data platform. • MS SQL Server & SQL Parallel
Data Warehouse & Center
• Develop these applications on a standardized
• MS BizTalk Server
platform using an integrated group of core server
technologies and development tools. • MS Office SharePoint Server
• MS Visual Studio Team System
• Negotiate pricing at the beginning of the 3 year
contract term based on the deployment schedule • MS Expression Studio
making fixed annual payments; extend to as many • MS Office PerformancePoint
as 6 years if appropriate. Server business intelligence
software
• True-up at the end of the agreement, or choose to
• FastSearch for SharePoint
true-up annually.
• MS System Center Server
• Combined APA with your Enterprise or Enterprise Management Suite Enterprise
Subscription Agreement.
• 24x7 unlimited support with
$250,000 spend
Info-Tech Insight:
Beware: easy deployment options come with great deployment responsibilities ! Be sure to
budget for the true-up at the end of the contract term.


Enroll in Microsoft’s Core Infrastructure (ECI) to cost effectively
gain virtualization, security and management in one suite

• Use ECI to simplify licensing for core ECI includes the
infrastructure server products based on following products:
Microsoft’s Core Infrastructure Optimization
Model to provide end to end solution to manage • MS Windows Server (1 of 3
options)
from the desktop to the datacenter.
• Standard (1 virtualized
• Combine with Enterprise Agreement to server)
purchase required Core CALs. • Enterprise (4 virtualized
• Save 13-29% by purchasing products bundled, servers)

with the cost at 5-15% more than the price of just • DataCenter (unlimited
virtualized servers)
the windows servers.
• MS Forefront Clients
• License physical and virtual systems on a per • MS System Center
processor basis.

Info-Tech Insight:
This program starts with a 50 processor minimum and licenses products through one of 3 suites
and is therefore geared to a larger infrastructure.


Consider these points when migrating to a new licensing program

If multiple agreements exist and need to be consolidated into a single contract:

• Start negotiations 60 to 90 days prior to the first expiry date as there is no grace period, and missing
the expiry could lose your Software Assurance investments.
• Microsoft will provide credit for Software Assurance contracts with future expiry dates.
If moving from a transactional program to a contract program:

• Be well prepared for your negotiations as you are in a position of power.
• Inventory licenses and installations to ensure adequate licenses are negotiated into contract.
• Know your compliance status to counteract any threats of compliance action.
If moving from a contract program to a transactional program or are dropping Software Assurance:

• Do a final true-up to be compliant and prepare for an audit.
• Purchase additional licenses in final true-up to accommodate any new licenses needed over next 6 – 12
months to take advantage of discounts.
If moving from subscription to perpetual contract program:

• Start negotiations 90 days or more prior to expiry date – if contract ends before negotiation is
complete, you will be in a non-compliant situation with your licenses.
If combining different types of agreements, such as Enterprise and Office 365 or Microsoft Partner
Program:
• Negotiate the agreement simultaneously as this is the time when you will have the greatest leverage.
• Define your enterprise to exclude licenses covered under other programs.

Create Analyze Calculate the Decide which Negotiate and
technology product Value of license manage your
Roadmap licenses to Software program will agreement
find the most Assurance to suit your
solution

1 2 3 4 5


• Choose your vendor
• Negotiate your agreement
• Manage your agreement

Info-Tech Research Group

Choose a vendor who will support your
software asset management efforts

A complex, formal RFQ may not be appropriate for Microsoft licensing. If buying
through a transactional program or Select Plus, prices will vary between resellers,
but if buying through the Enterprise agreement, Office 365 or APA prices are set by
Microsoft. In that case, an RFI might be more appropriate. Here are some things
you can look for in a Microsoft software vendor:
 Does the vendor supply a hardware  Do they offer training? Are they a
and software catalog online? Microsoft accredited training center?
If so, do they have flexibility for on-
 Does the vendor supply online site, Web-based or off-site training?
reporting or software reports on (Is this important to you?)
demand? (Request a sample copy)
 What kind of support can this vendor
 Does the vendor have software provide that will supplement the
licensing experts on staff to answer support you receive from Microsoft?
questions?
 Can you use your deployment
 Can those experts provide copies of planning credits (if signed into SA)
contracts and end user agreements with this vendor, and will they provide
before you commit to signing? any enhancements to the planning
 What will the vendor do to help you process over other vendor offerings?
with your asset management efforts?

Prepare to negotiate using the Software License Negotiation
Summary template and strategy documents checklist
If purchasing through a transactional program, you will have less negotiating
room than with a contract program. This doesn’t mean you won’t have any
options, especially if introducing new technologies. Talk to your Microsoft
Account Manager about promotions and discounting.

Fill out the Info-Tech Software License Negotiation
Summary template to create your company and
software requirements profile and combine with the
following:
 Microsoft Roadmap
 Product Use Rights
 ROI Calculator for Software Assurance
 License Program Decision
 Copy of contract if applicable
Use this as a guide when negotiating your
agreement and for documentation for your thought
process when negotiating your future renewal.


Strategize with your team to complete your final preparations to
lead the negotiations

• Collaborate with your IT Team, Purchasing and Legal teams to pull together your
information prior to meeting Microsoft and create your negotiation strategy so
you can be the lead in the negotiations.
• Complete the final true-up, if renewing an Enterprise Agreement, purchasing any
last licenses needed to create a risk of non-renewal, allowing you the option to
walk away if needed.
• Read the contract prior to meeting Microsoft.
• Investigate alternative technologies if it is appropriate, but only threaten to move
away from Microsoft technology if it is a viable alternative; Microsoft has been
hearing idle threats for years.
• Be prepared with alternative licensing options; lead with your ultimate plan, but
have the ability to pull back if budget and terms & conditions cannot be met.

For additional negotiation strategy information, see IT Resource Management: Vendor
Management Negotiate Contracts.


Define your enterprise & product requirements prior to meeting
with Microsoft to speed discussions
• Request special pricing to step up current licenses to suites, for
example: licenses of Windows and Exchange CALs can be upgraded
to Core CAL suite
• Define your enterprise, noting that “qualified computers” may exclude groups
of computers such as line of business machines, computers covered under the
Microsoft partner network agreements or development computers licensed
with Visual Studio w/MSDN licenses , as they include Office licenses for
production use
• Know your compliance status to defend against threats of a Microsoft audit;
this will include software licensed through third-party vendors, such as
Windows and SQL server licenses provided as OEM licenses with vendor
solutions
• Note any desired product changes such as converting Device to User CALs or
modification of server licenses to accommodate virtualization
For additional information on the Microsoft Partner Network see Understand the Microsoft
Partner Network.


Meet with the right people to
negotiate & close your agreement

• Negotiate prices for new licenses, Software Assurance and true-ups, terms & conditions,
audit terms, payment structure and grace period for renewal.
• Perform a 6 year financial analysis to get a feel for future costs; and extend agreement to 6
years if it makes sense to do so to lock in prices.
• Consider a partial platform Enterprise agreement if the full platform is not appropriate.
• Know that Microsoft’s year end is June 30th, and if you are fortunate enough to be in the
position of starting a new agreement around this time, Microsoft will be more generous in
an attempt to close business before their year end.
• Understand that your Account Manager’s goal is to grow the new agreement 15-20% over
your previous one.
• Negotiate directly with Microsoft, rather than through your reseller if you want to get the
best price and terms & conditions; and don’t be afraid to ask your Account Manager to
involve an Executive to resolve negotiation points.
• Ensure the contract addendum lists all agreed upon negotiation points before signing, as
anything agreed to verbally or by email will be voided by the contract.


Assign a dedicated administrator to achieve greater satisfaction
with Microsoft licensing

• Assign a license and software
administrator if one isn’t already in place
who can manage the assets, monitor the
agreement(s) and deploy Software
Assurance benefits.
• Document strategy & success factors
leading to current contract to assist in
next renewal, especially if multiple
agreements exist.
• Sign up for eLicense site and Software
Assurance benefits for easier
management.
• Roll out benefits with new software
versions (i.e. eLearning, server technical The MS licensing strategy success was calculated by
training). taking the average of the following items:
Microsoft eLicense site & sales support
• Review software assets quarterly and MS SA benefits use and adoption
redeploy licenses as appropriate Vendor knowledge & support
Ease of license management
• Complete annual true-ups to keep Ease of budgeting
compliant. Comfort level with software spend


Appendix


Appendix: Microsoft Open Volume & Select Plus Details

Points Value: Discount Tiers

Applications Pool Open Volume = 500 points per product pool
• Single Application (Project, Visio) = 1 point minimum purchase, reorders of single licenses
• Office Suite = 2 points
• Office Rental Rights = 1 point Select Plus = 3 year forecast per product pool
• Software Assurance = 1 point/year with 1/3 point purchase required each year
Systems Pool A = 1,500 points
• Windows OS = 2 point B = 12,000 points
• Software Assurance = 1 point/year C = 30,000 points
Server Pool D = 75, 000 points
• Client Access License = 1 point
• Standard Servers = 10 points No expiry date on Select Plus, but minimum
requirements of 500 points per year must be met
• Enterprise Servers = 50 points
otherwise the agreement will be suspended

A complete list can be found at:
http://www.microsoftvolumelicensing.com/


Appendix: Microsoft Open Value & Enterprise Details

Open Value: Enterprise Agreement

Open Value = 250 desktops Company wide program committing all eligible
desktops to coverage of Office, Window and /or
Open Value C = 250 – 750 desktops Core CAL Suite* Licenses and Software
Pricing is comparable to Enterprise Level A. Assurance. The contract commits you to annual
This program is most useful where a strong license true-ups.
relationship exists with partner who is not a
Microsoft LAR. This program offers the deepest discount
available with additional discounting for larger
In most cases, companies at this level will volumes:
purchase under Enterprise to gain higher
A = 250 - 2,399 desktops
Software Assurance Benefits.
B = 2,400 – 5,999 desktops
Platform Option offers discounts if standardizing C = 6,000 – 14,999 desktops
on all desktop licenses (Office, Windows, D = 15,000 + desktops
Core CAL Suite*).
Also includes 20 free training copies of any
Company Wide discount deepens discount by products your company is licensed for and 10
15% (confirm).
evaluation copies for any Microsoft software.

*Core CAL = Client Access Licenses for Windows, Exchange, SharePoint and Systems Center
Configuration Manager.


Appendix: Survey Questions for Visio & Project Use

Visio 2010 Project 2010

• Do you require Visio for diagramming Six • Do you create, view and update files
Sigma, SharePoint workflow or Business exclusively on your workstation? (Standard
Modeling Notation (BPMN) ? (Premium) 2010)
• Do you require Visio for diagramming software • Do you view, update and analyze project data
located on the server, but do not create new
application design, pivots, engineering, ITIL ,
projects? (Client Access License 2010)
networks, Website mapping, HVAC, electrical,
• Do you require the ability to create, update and
architectural or plumbing plans?
analyze project data as well as view resource
(Professional) availability, skills and project status on the
• Do you require Visio for flowcharts, server? (Project Professional 2010)
Brainstorming, mind maps, organizational
charts, or project management diagrams? Note: CAL is less expensive than Standard and
(Standard) Professional is the most expensive. In order to
use Professional and CALs on the server, Project
Server 2010 must be installed and requires
SharePoint 2010, SQL 2005 or later, Windows
2008 or later.


Appendix: Microsoft Subscription Programs

Subscription requires an annual true-up or true-down, includes media downloads
and access to the most current software versions.

Subscription:
• Requires an annual true-up or true-down.
• Includes media downloads and access to the most current software versions.
• Transitions existing licenses into subscription fees.
• Offers additional discounts if existing licenses are current.
• Is available in Open License (5-249 desktops) or Enterprise (250 + desktops).
• Tiered discounts are also available in Enterprise for larger quantities.
• Company-wide discount applies if all eligible machines are licensed in Open
Value Subscription.
• Most Microsoft resellers can provide Open Value Subscription, but only Large
Account Resellers can provide Enterprise Subscription.


Appendix: Interdependencies of Microsoft Products

Office 2010 has new features which Project Enterprise (formerly Project
require use of a SharePoint 2010 server: Server plus Portfolio Management)
requires SharePoint 2010 for:
• Co-authoring feature allowing multiple users
to edit a document at the same time • Portfolio Management features such as
• PowerPoint synchronized slide shows using resource capacity planner for managing
PowerPoint Broadcast Service multiple project resources, costs,
• PowerPivot to consolidate and publish large benefits/risks and priority
amounts of data from unrelated sources using • Project Web Access using JavaScript for
Excel 2010 via SQL Server 2008 R2 Analysis reporting and collaboration
Services
• Office Web Apps for users to access Office Visio has sharing capabilities that use
applications and documents through a SharePoint 2010:
browser
• Visio 2010 Premium (new) includes new
Servers templates and validation rules for workflows,
• SharePoint 2010 requires SQL 2005 or Business Process Modeling Notation and Six
higher Sigma Processes
• All server applications require • Visio services permits users to view diagrams
Windows Servers using a web browser

Check requirements for all products using Microsoft’s “Licensing Briefs” to verify
operating system and other requirements.

Appendix: Microsoft Windows MDOP

MDOP is available only as a benefit to Software Assurance and includes the
following features:
Microsoft Application Virtualization (App-V) turns applications into on-demand, centrally
managed services.
Microsoft Enterprise Desktop Virtualization (MED-V) deployment and management of virtual
PC images for applications requiring an older Windows version.
Microsoft Asset Inventory Service (AIS) hosted software asset management service.
Microsoft Diagnostics and Recovery Toolset (DaRT) tool for troubleshooting, repairing and
recovering data on unbootable Windows based desktops.
Microsoft System Center Desktop Error Monitoring (DEM) an agent-less tool which provides
insights into failures on applications and operating systems, allowing helpdesks to manage PC
problems.
Advanced Group Policy Management governance and control tool providing change
management, versioning and role-based administration.

Source: Microsoft Windows Enterprise


Appendix: Microsoft Business Productivity Online Suite Roadmap

2009 2010 2011
April 2009 August 2009 Jan 2010 June 2010
• Deskless Worker • SMTP Relay • Outlook 2003 Connector • Hosted Blackberry Administration
• 19 New Markets • Exchange • Exchange Online Usage Reporting Center
• OC Online Journaling • Expand Languages and Markets • Office 2010 support
• Blackberry Device • New language in • CRM integration with Exchange Online • Enhance Powershell scripting
Support MOAC • Delegate Administration • Enhance syndication partner interface
June 2009 • Multi-tenant Blackberry Device Support
September 2009
• Increase mailbox • Support 30K seats March 2010
attachment size • Improve Mac • 25GB mailbox storage per user Q1 2011 (Preview Q4 2010)
• Outlook 2003 w/o Support default • Update with Exchange 2010 Server
Free Busy • Bulk Activation • Extend SharePoint site collection • Update with SharePoint 2010 Server
• POP Mail Client limit Update with Communicator 2010
July 2009 • Improved domain management Server
• Hosted Exchange • File attachments to service requests • Office Web Apps
migration tool • Support for Mac OS X Snow Leopard • Free/Busy co-existence
• Increase • Enhance Live Meeting Usage • Single Sign On with identity federation
SharePoint Reporting • Redesigned User Interface
upload size to • Enhance Live Meeting Recording • More administration and access control
250MB Publication Process H2 2011
• Live Meeting • Enhance service communication via • Communication Online
Standard to 250 RSS Conferencing
users
• Communication Online Voice
• Quick Trial April 2010 • New markets and languages
• Partner order on • Extend service in 17 additional • More to be announced
behalf markets
Data supplied through Microsoft BPOS High Level Roadmap

Appendix: Measure of success & effort as noted
on license management slide

The MS licensing strategy success was calculated by The MS licensing strategy effort was calculated by
taking the average of the following items: taking the average of the following items:
Microsoft eLicense site & sales support Created technology roadmap
MS S/WA benefits use and adoption Compared licensing programs
Vendor knowledge & support Completed cost/value analysis
Ease of license management Researched Microsoft product use rights
Ease of budgeting Examined different licensing models
Comfort level with software spend Issued an RFP to find the lowest price
Researched vendors for licensing support

Appendix: Microsoft Reference Tools

Volume Licensing Briefs: Microsoft provides in-depth assessments of common questions
around complex licensing solutions.

Microsoft Volume Licensing guides: Information on Software Assurance, Product Use Rights
and Quote Builder.

Microsoft MDOP ROI Tool: calculate the return on investment for MDOP (login required).

Source: Microsoft Volume Licensing


Appendix: Research Demographics

Info-Tech conducted a survey to generate the data needed to create this research.
The following are graphs depicting the demographic information of those who
participated in the survey.


Appendix: Survey Questions
1. Does your company current have a dedicated person assigned 5. Rate your satisfaction with Microsoft licensing.
to administer your licensing programs?
2. Do you currently have Microsoft Software Assurance in place? • Microsoft eLicense site and sales support
3. The Microsoft Software Assurance program comes with many • Microsoft software assurance benefits use and adoption
benefits. Describe the level of importance at the time of
• Vendor knowledge, license support and reporting
signing your agreement and now for the following benefits:
• Ease of license management
• Upgrades: Version and Step Up Upgrades
• Ease of budgeting
• Windows Enterprise 7, MDOP
• Comfort level with software spend
• Desktop Virtualization
• Support - 24x7 calls, Web Support, Technet
6. Do you agree with the following statement?
• eLearning for end users (online training)
• Classroom Training for IT staff
a) Dropping Microsoft Software Assurance to save money in the
• Deployment Planning
short term has resulted in companies overspending to reach their
• Multi language Rights technology requirements.
• Virtualized Applications
• Roaming Use Rights b) Choosing a vendor based solely on price causes many
companies to overbuy software and overspend in management.
4. Prior to making your Microsoft software purchase how much
effort was devoted to the following activities? c) Microsoft’s hosted applications (SaaS) are available to save IT
• Created technology roadmap costs and simplify licensing.
• Compared licensing programs to determine the correct fit
• Completed cost/value analysis of software assurance by
individual product families
• Researched Microsoft product use rights
• Examined different licensing models to find the best fit
• Issued an RFP to find the lowest price
• Researched vendors for one with a strong licensing
support structure


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