Microsoft recently announced that it is introducing a new licensing program called Enterprise Advantage.
The new program will be introduced in early 2017. Many IT media outlets suggest that this could signal the end for the existing Enterprise Agreement in the long term.
WHAT IS ‘ENTERPRISE ADVANTAGE’?
Enterprise Advantage on MPSA is a variation of the existing MPSA (Microsoft Products and Services Agreement), due to be introduced in 2017. It is best explained as an organization-wide version of the current MPSA. Similar to how you can have a transactional Open Agreement or you can get an Open Value company-wide agreement.
Having an Enterprise-wide agreement results in bigger discounts based on the total number of seats. When released, the Enterprise Advantage scheme will be made available first to Microsoft customers that currently have an MPSA, before being made available to customers on other programs. Enterprise Advantage will initially be aimed at organizations that have between 250 and 2,400 users.
However, the reason why it is being seen by many as an Enterprise Agreement replacement is because Microsoft has plans to upscale Enterprise Advantage and MPSA numbers to accommodate larger organizations due to its flexibility and ‘mix and match’ ability. You also can mix cloud services/online services with perpetual licenses (you can do this at present). It’s a transactional agreement which makes a lot of things optional.
At the moment it is points based. What this will do is allow you to qualify for the discounts you get on an Enterprise Agreement with an MPSA agreement – meaning there would be no reason for separate agreements. T
his is particularly beneficial to those in the academic sector as they can bring all of their agreements together and get a greater discount based on the number of seats within the organization.
Initially, the agreements scheme will be as follows:
|Number of Users||Suggested Program|
|0 - 249||Cloud Solution Provider (CSP)/ Enterprise Advantage|
|250 – 499||Microsoft Products & Services Agreement (MPSA)/ Enterprise Advantage|
|*500 – 2,400||Enterprise Advantage (optimial numbers)*|
|2,401 >||Enterprise Agreement/ Enterprise Advantage|
Moving forward, the Enterprise Advantage and MPSA is likely to replace the Enterprise Agreement and be available for organizations with 500 users and above.
Microsoft says that Enterprise Advantage will provide customers with greater flexibility and a more modern software licensing scheme that reflects recent changes in licensing metrics and technology. It is a further shift towards the Cloud and Microsoft claims that the new program helps make licensing simpler for customers, which in turn makes it easier for Microsoft.
Mark Nowlan, Director of Licensing Marketing, states, “Our software licensing has been based on traditional software, not on Cloud services. As we wanted to serve more customers and build more programs, we had to adapt our license agreements for the cloud and the number of options grew too much for anyone to manage well.”
SNOW EXPERT ANALYSIS
The move is definitely a step forward in terms of encouraging further Cloud technologies adoption. The agreement is being billed as being more flexible to help customers tailor an agreement that is right for them – something that has been seen by many as a Microsoft failing till now.
Andy Mason, a Microsoft Licensing expert at Snow Software believes that this is good news for Microsoft customers. Because of the ability to mix and match your agreements will enable customers to be more agile and flexible with their Microsoft agreements.
From a management point of view, the ability to manage subscription and perpetual licenses under a single master agreement will make it easier for customers to manage.
Kelly Woods agrees that it will help customers spend less on software licenses, but it makes the temptation to over-purchase licenses greater. The fact that the agreements are so flexible and you can constantly add licenses to the Enterprise Advantage means that many organizations will end up spending too much money on Microsoft licenses.
This is why you need Software Asset Management to help govern such expenditure. Enterprise Advantage is definitely a change for the better for those with a Software Asset Management function and platform like Snow License Manager. It makes the transition for those wanting to move to a subscription licensing easier and cheaper.
It also helps from an audit point of view – you have all of your licenses and agreements under one master agreement. The challenge of managing multiple contracts with different metrics will be significantly reduced.
HOW WILL THIS IMPACT YOU?
Having the ability to migrate all of their existing agreements under one flagship contract means that bigger discounts will be realized. Microsoft has a number of different ‘price brackets’ based on the number of licenses. The more licenses required, the bigger discount.
Enterprise Advantage will also enable Microsoft customers to have the latest version of the software they have purchased which is in line with Microsoft’s existing subscription licensing mantra. They want people to have the latest and greatest version and have a regular revenue stream so Enterprise Advantage ticks all the boxes for Microsoft.
What will also impact customers is the fact that the dates will be aligned. Confusion and issues around different Microsoft contracts having different anniversary dates will be eradicated. It’s not unusual at the moment for customers to have different dates for different contracts and they end up focusing time and effort on one contract, not knowing that their Select agreement is also due for true-up. This means that they renew ‘as is’ rather than trying to optimize their position.
Naturally, it is important for Microsoft customers to have the right Software Asset Management processes in place to ensure the organization manages Enterprise Advantage agreements and that they don’t end up over-spending on software licenses. It will be easy to look at the new structure and discounts that may be received and overspend because there is budget left over.
Through SAM processes and technology you can ensure that you have the reliable usage data to guarantee your investment in Microsoft’s Enterprise Advantage will be optimized.
A potential issue with the Enterprise Advantage agreement is knowing and understanding what is ‘owned’ at the end of the agreement. Thanks to the ability to add perpetual and subscription licenses to the agreement, organizations are then left with a spread of licenses they own, and those they effectively rent. Managing contracts and licenses through a central Software Asset Management platform will help keep on top of such a dynamic offering.
Through Snow License Manager users have the ability to specify which software licenses are perpetual and which ones are subscription. By setting a ‘subscription period’ to the license, you can be sure that the license will only be valid during the set period. Once the subscription period expires, so will the license and your compliance will be affected.
This is done automatically. You will then have visibility on what licenses will expire, and what licenses are perpetual. This will help you optimize your Enterprise Advantage contract and understand any potential fall-out post agreement. Microsoft and Snow customers will have complete visibility and control to ensure that they get the most out of the new Enterprise Advantage scheme and invest money in Microsoft licenses wisely.
Enterprise Advantage will be available in early 2017, with Education Advantage and Government Advantage following later in 2017.
Microsoft licensing is one of the biggest pain points for organizations. We have recently released an e-book “5 Ways to cut spending on Microsoft software” that highlights how Snow Software can help you reduce your spend.
 Microsoft Announces ‘Enterprise Advantage’ for MPSA Licensing https://rcpmag.com/articles/2016/07/05/enterprise-advantage-for-mpsa.aspx