Having worked with numerous Microsoft customers on licensing reviews and audit defences, I have become accustomed to the areas of Microsoft licensing agreements where businesses fail to fully protect their software investments. Most businesses pay more than they need by procuring software they do not require, or at least by failing to optimise their current Microsoft licensing investments.
Fully understanding your Microsoft Enterprise Agreement (EA), and sticking to the principles of the agreement, is necessary to ensure you keep track of your Microsoft licensing requirement. This will ensure your business is both compliant from a licensing standpoint and well-prepared to negotiate future EA renewals to efficiently purchase the right licensing mix for your business.
When we discuss Enterprise Agreements, we are referring to three types of Enterprise Agreement Enrolments: Enterprise Enrolment and Enterprise Subscription Enrolment, for desktop products and server products (without a commitment on minimum licence quantities), and the Server and Cloud Enrolment, for server products, Visual Studio and Azure.
Correctly managing and optimising your Microsoft EA will offer key cost saving opportunities for your business. Here are some of the common areas I frequently encounter where organisations can save cost on future Microsoft Enterprise Agreement renewals.
Additional Products vs Enrolment
When you sign an Enterprise Agreement, you commit to buy a minimum quantity of licenses (enterprise products) or to spend a certain amount of money (specifically a commitment on Azure). Higher discount levels are available depending on the different Enterprise products chosen and the size of the commitment. An organisation must commit to purchasing at least one of the Enterprise Products for every Qualified Device or User in their estate but can go far beyond that. If you choose one product from each pool, you may furthermore qualify as a platform, like the Professional Desktop Platform and the Enterprise Desktop Platform, which can attract even further discounts.
This provides incentive from Microsoft to add up as much products as possible in your enterprise commitment to maximize the discounts. After all, Microsoft knows when you enter an enterprise commitment it will provide steady revenue for them and they can bundle in other features and tools to hook you onto their new product lines. However, it can be questioned whether it is always in your interest in the long run. Besides the enterprise products, you can of course also add in “additional products”. Some products are only available under the additional category, while others could qualify as both.
While it is tempting to put as much as possible into the Enterprise products, I recommend to not always opt into the discount straight away. Buying some products as additional products may seem more expensive, but you do gain additional flexibility to scale up when needed when you slowly implement the solution to a dedicated set of users, or to scale back down when you find out that the new product did not work out as you expected. It may seem more expensive at first glance, but you might end up saving money in the long run. Building multiple scenarios and benchmarking the different outcomes is key.
Getting the Correct Qualified Counts
As mentioned above, the foundation of most Enterprise Agreements is a commitment based on the number of users or devices. Doing this correctly can be a challenge though and is a very common problem found when we do internal audits. To correctly assess the situation, we recommend a detailed analysis of Active Directory combined with some other sources. Microsoft uses similar methods in their compliance audits. Where they focus on any reason to increase your numbers it can be worthwhile to verify for optimisation as well. Some common issues we find during our analysis:
– Disabled or inactive users and devices are counted. This is especially a problem with Office365 as users often still have some or all licenses assigned. This can be avoided by cross-checking your assigned licenses with Active Directory to find out if users are active. User a third source, like HR records may help you as well to limit the number further.
– Service and Admin user accounts are counted as real users. Good management and naming conventions can come to the rescue here to avoid this problem. Often it will still come down to manual identification though.
– Third party user accounts provided with full licenses. Contractually you are obligated to provide third party users like contractors and outsourcer admins with licenses if they access your systems, though this does not have to be the full suite your employees get. Third party users are generally exempt from the Qualified User count so can be given a customized (cheaper) set.
Why Extending Your Enterprise Agreement Could be the Right Option
Many customers do not realise that they have the option to extend their EA period beyond the standard three years, rather than going through a renewal. Microsoft customers are not forced to start a new agreement after three years, organisations can request an extension.
This is useful if the customer organisation is not ready to establish an optimised number for their Microsoft licenses. Rather than being rushed into a new agreement, which may lock the customer into a further three years of sub-optimal licensing, the customer can request an extension and spend the next 12 months performing the work required to optimise the renewal.