As a Microsoft GOLD partner, we are asked by our clients why Microsoft Enterprise Agreements can slow down a business and cost you more in the end. It seems to be a trend that every company with a Microsoft Enterprise Agreement is now asking themselves and customers are confused why there appears to be conflicting programs from Microsoft on how to consume their licensing.
We aim to clear the air with this article, and provide anyone with an Enterprise Agreement (or, ack if you are leaning going towards an EA) with clarity on why EA still exist, and an insight into Microsoft’s progression away from Enterprise Agreements (and why).
Microsoft’s Enterprise Agreement (EA) was once the “go-to choice” when purchasing Microsoft products and likely is the single largest IT expense in your organization. But that is all in the past. Your business and IT department have evolved, and so has the way you use Microsoft software. So why are you still using an EA? With the shift to the cloud and the rapid pace of innovation in software and new features, 3-year license contracts don’t make sense. It’s about time you rethink Enterprise Agreements, and we will show you why.
Microsoft introduced the new Cloud Service Provider licensing program as the next evolution for Microsoft consumption licensing. As the world moves towards consumption-based services, long-term contracts with upfront capital expenditures truly limit a company’s ability to react to changing economic conditions and fluctuating organizational needs.
There are 3 critical challenges that legacy Enterprise Agreement licensing models place on your business:
- Long-Term Contracts
- Unused Solutions
- Support Concerns.
Enterprise agreements require a 3-year contract for everything you purchase. This requirement limits your flexibility to downgrade, remove or add items as your business circumstances change (at least, not without lengthy negotiations, time-consuming discussions and potentially large legal costs).
Planning for 3 years at a time forces an organization to estimate what you may need in the future. Large packaged solutions can become outdates, under users or undeployed as your needs change. With an EA however, you are locked into the agreed upon subscription and cannot always make any adjustments with any sort of ease.
Enterprise Agreements also have limited support built into them organically. To take it a step further, the support that is included may not meet your corporate culture needs, which forces you to purchase premium support contracts up front. If you need the support and use it, then it is worth it. But why pay for services that you may or may never use? It is difficult to gauge a company’s future needs, especially when it comes to how an EA’s rigid structure may constrain you.
Microsoft realized that EA’s are not suitable for every size company. If you are the size of General Motors, Hitachi or British Petroleum, it may make sense to continue your EA contract, but for 99% of the world, Microsoft has evolved the program, embraced their channel more efficiently, while delivering a much more mailable solution for organizations around the world.
Microsoft GOLD partners are the elite of the elite in the Microsoft world, and they have a strong value add that they are enabled by Microsoft to deliver to 99% of the world’s markets. Microsoft has enabled their partners by opening up consumption-based licensing with a new world of flexibility when it comes to procuring and managing software licensing. Instead of a 3 or 5 year commitment that is required with a Microsoft Enterprise Agreement, your Microsoft partner can provide you with a real-time month-to-month agreement that fluctuates with your actual business consumption.
This new way of consuming Microsoft licensing means you only pay for what you actually use, which almost always results in significant savings short term and over the long haul. More importantly, this new form of agreement are provided through your Microsoft Partner, which means you also receive INSTANT ACCESS to Microsoft Premier Support. In an Enterprise Agreement, access to this support is a PREMIUM.
Leveraging your partner also means you get to leverage a dedicated team that knows you and your business, so you never have to explain your problem from the beginning every time you need support. Think of it this way… would you rather be a “Small Fish in the Ocean” or a “Whale in a pond”?
Microsoft developed the CSP partner program to meet the rapidly evolving needs of today’s IT environments. With ever-changing requirements, restrictive budgets, and the need for instant results, the CSP partner program is the ideal choice. Microsoft CSP provides a flexible, cloud subscription model for customers to buy Microsoft cloud solutions such as Office 365, Dynamics 365, and Azure, with complete partner support! The Microsoft CSP licensing platform is seamlessly integrated allowing for instant provisioning of new licenses, consolidated and automated billing, and insightful reporting.
Partnering with a GOLD Microsoft Cloud Solutions Provider (CSP) for Microsoft Licensing provides:
- A dedicated team with the knowledge and experience to truly help your business succeed
- The peace of mind of One Partner | One Platform | One Bill
- No upfront costs or termination fees and pay-as-you-go subscription pricing
- Tier 1 support with priority access to escalated Microsoft Premier Support
- Self-service license and billing management portal – add or remove new licenses or products instantly with the click of a button
- Proactive monitoring and optimization of your products and services so you are getting the most value from what you use
Is an Enterprise Agreement with Microsoft right for you?
Since early 2019, there has been a major shift in how companies are consuming Microsoft Licensing: from Enterprise Agreements to the partner-led CSP model.
EA’s are typically used by large enterprises that can maintain OVER 500 USER licenses at a minimum. There is a need for fixed software pricing and fixed subscription licensing for at least 3 years. Interestingly enough however, many large enterprises continue to switch to the partner-led CSP model for its greater flexibility and undisputable cost-savings.
Microsoft actually recommends for businesses coming up on their EA renewal to look at CSP licensing, in addition to new businesses getting started with Microsoft subscription licensing. The new way of consuming Microsoft licenses is typically used by organizations less than 500 users, however we have seen cases where even organizations that exceed 5,000 users find significant savings with the new program, while allowing for more flexibility and enhanced support.
Businesses that want the greatest flexibility to add or remove licenses as needed and not pay upfront for all their services opt for CSP. This allows for predictable monthly usage bills and shifts expenses from capital expenditures to operational expenditures.
If your organization is looking for a scalable solution that allows your business to evolve as it grows and its needs change, then working with a Microsoft GOLD partner like Infinite IT is your best bet. The way we partner with Microsoft lets you add or remove users and products instantly and you only pay for the licenses you use. Infinite IT can help you with:
- IMPROVED SUPPORT – Infinite IT’s staff are all located in Canada and are available 24 x 7 x 365.
- PREMIER SUPPORT – Infinite IT has direct access to Microsoft’s Premier Support Channel that customers do not get access to
- PROACTIVE PARTNER – Your dedicated team at Infinite IT is here to provide you with expert guidance: Microsoft heavily relies on its channel partners, and no one knows Microsoft’s cloud platforms better than Infinite IT’s experts do!
- GREATER FLEXIBILITY – Our team is here to accommodate ANY and ALL licensing needs.Adding, Changing, Removing or Migrating your Microsoft licenses or products instantly is included with your monthly subscription
- CONVENIENT BILLING – Infinite IT can consolidate your billing to take strain off your finance team and reduce the burden of managing your Microsoft licensing from your IT team.
In today’s environment, how you buy and consume everything has changed. Society has moved to a consumption-based economy for everything we want, and businesses are realizing the savings that can be realized by doing the same thing. It is time for a modern approach that reflects how your business operates and gives you the flexibility to adapt to changing conditions on the fly. Only a Microsoft GOLD partner can help you overcome operational challenges while ensuring your licensing costs are kept to a minimum. Transition to the cloud with expert advice and optimize your IT costs with Infinite IT.