SoftwareONE PyraCloud Evolves

SoftwareONE are evolving a ‘single plane of glass’ cloud spend management platform, with PyraCloud (see the article on Forbes) enabling businesses to get visibility and control of their cloud portfolio, across the entire software lifecycle. Visibility is an important problem, (you can’t make a decision on what you can’t see), and while there are a lot of point-solutions providing pure consumption analytics, the extension and evolution of that is providing control. The APIs are there, but the evolution of the ecosystem is down to actionable intelligence. Moving SoftwareONE into a new market for cloud expenses, what Concur has for for work expenses.

The new Cloud Management enhancements in the latest update, enable organizations to govern and manage budget and spend in a multi-cloud environment (Azure and AWS). There are several features that help customers better govern and manage the budget and spend of their multi-cloud environment.  The new features provide the following benefits: 

  • End-to-end multi-cloud transparency: Tag and Resource Manager allows organizations to discover, normalize and consistently track resources across cloud providers, such as Azure and AWS. 
  • Accountability by business unit: Custom Group Manager allows organizations to define cost structure and map cloud resources to cost structure as business units, applications or project. 
  • Cost control of cloud resources: Cloud Budget Manager enables organizations to create budgets by cost structure and proactively track spend against budgets for cost control 
  • Customized dashboards and reports: Updated Analytics Viewer provides cloud consumption insights to stakeholders and lines of business to fully optimize usage and spend of cloud resources.
  • Check out the whitepaper here and an inverview on the cube

How does this align with Microsoft licensing?

As Microsoft have secured their targeted $20B annual run-rate cloud commercial business, with Office365 up 42% and Azure up 90%   there is an increasing challenge for organisations to take control of their spend and deliver value to their business across the cloud lifecycle from procurement to adoption and ongoing management. The next challenge for businesses is to have a ‘platform for decision making’, (something my team have been doing when reviewing SQL environments for the last 4 years), if you understnad your environment, and can understand how your licensing assets are being used, and the commercial value or risk of your environment, you have a platform to make those decisions that drive value or spend reduction.

Thanks All,

Tony Mackelworth

Microsoft EA Renewal

The Microsoft Enterprise Agreement (EA) is the primary contractual vehicle for enterprises to make volume, normally enterprise-wide commitments, to the increasingly expansive solutions and services stack from Microsoft.

For most businesses, this was a vehicle to optimally buy Microsoft Office and Windows, enable users to access Server Products like Exchange, SharePoint or Skype,  and in more recent iterations, commit to Microsoft Cloud service offerings like Office365 and Azure.

Modern Commercial Strategy

Redmond has sought to increase profitability of their cloud business and pivoting their licensing partner ecosystem towards cloud adoption, management and support services; and away from the associated cost of channel rebates, documents of sale, and growing monetary value of discounts incurred by Microsoft (enough to buy a company the size of Citrix).

In 2016, Microsoft reported 49% profitability for cloud services in earning reports to investors. In 2017, Microsoft EA renewals bookings grew 14% and 9% in constant currency. Microsoft Cloud profitability increased 8 points to 57% and Satya Nadella secured his target of a $20B annual run-rate cloud commercial business. The main drivers of growth, was Office365 up 42%, and Azure up 90% in 2017.

As licensing costs also increase, their end-customers are under pressure to seek independent advice, ensure value, and enable cost savings at their next EA renewal.

Microsoft’s modern commercial strategy greatly incentivises standardisation on an always-up-to-date platform for productivity and communication supported by the Microsoft Cloud. Microsoft exemplify this strategy through the cloud-supported solutions with ongoing security and feature updates provided by Microsoft.

The new generation of cloud supported applications and operating systems act as a ‘traffic light’ that are switched on from ‘red, to amber and then green’ with cloud services. Under the traditional on-premises software model, access to new features were accessed by upgrade of the office client to the latest software version, on a four or five year run lifecycle. Microsoft have increased this release and update cadence, with an extensive ecosystem of Office365 and Azure Identity Services accessed by Office, and Windows 10, and supported by SCCM, via a continuous service feature and support model, on a semi-annual release schedule.

To encourage upgrade of the Office ecosystem, Microsoft made a recent blog announcement  that as of October 2020, the traditional Office on-premise MSI application access to Office365 services will end at the expiration of “mainstream” support. Impacting customers limited to Office 2016 or 2013 releases and driving customers to ‘make a decision’.

Microsoft also announced recently that Office 2019 ‘perpetual’, aimed at on-premises customers, is expected in the second half of 2018; but how does this align with their wider ‘hit refresh’ strategy led by Satya Nadella, to deliver a $20 Billion run-rate cloud business? While Microsoft may have now confirmed a new traditional (MSI) release of Office 2019 for next year, the nomenclature of the announcement suggests this is targeted at customers who are running on-premises environments. Their support for “office perpetual” interoperability with Microsoft cloud services, and the available programmes it will be sold under, remains to be seen.

Accordingly, customers are responding to an eroding discount environment, with a strategic focus from Microsoft to position ‘premium’ tier 1 services within ‘expansive’ licensing packages, challenging Microsoft on both quantitative value and drive licensing cost savings.

A Structured Approach to Renewal

The advantage of  Microsoft Advisory Services is that we can work with the customer to understand their roadmap, and provide independent assurance to secure the right technology, on the right contracts, at the best price.

I normally recommend a ‘classical’ approach, enabled by data and human expertise, to assess the opportunity and impact of e.g. volume spend or platform commitment, mixed and joint bundling, licensing models, investment cadence, consolidation and bill of materials reduction and optimisation, to provide recommended client optimised scenarios and a clear commercial forecast, based on a customers own business and IT objectives.

Our consultants can help assess a true ‘baseline’, and optimum renewal scenarios for a client to enable structured analysis to empower the procurement team, illustrating the impact of new licensing metrics, software use rights changes, product price increases, price list increases, currency impact, business growth, end of life products, planned new IT projects and programmes, and assess current utilisation; to hold a vendor accountable for their commercial position and quantative or qualative deal principles.

Our team are dedicated consultants, backed by bespoke tools that allow us to provide analysis at a “dash”, giving us some advantage over other competitors are doing this analysis entirely manually, or indirectly. This allows to present reliable and accurate commercial models for fact based decision-making.

We have a proven track record of working on these renewal programmes and a passionate team who love what they do, we work collaboratively, and to your brief.

10 Recommendations for your Microsoft EA Renewal

  • Provide a renewal programme lead, with consultant resource from our Microsoft Advisory Services practice.
  • Independently assess renewal scenarios to provide for fact-based logical discourse with Microsoft.
  • Focus on different licensing and investment builds to provide an accurate commercial forecast.
  • Assess your current, and future investment in Microsoft solutions and services.
  • Secure advice on contract design, structure and terms aligned to that roadmap. The cost of the same bill of materials can vary greatly.
  • Seek independent analysis of any commercial offers from Microsoft, further enabled by current insight into current deal structures, sourcing options, and pricing.
  • Understand strategic solutions and services that are important to Microsoft.
  • Review licensing optimisation and bill of materials reduction for ‘big ticket’ server products like  SQL Server and Windows Server
  • Leveraging licensing assets for optimum investment in cloud services, whether Azure or AWS
  • Understand your curent-state environment, and assess software compliance, with a trusted advisor. Seek independent advice on your True Up.

We all know that there is increasing pressure on software buyers to control cloud spend, with demand for value realisation and clarity on the licensing TCO of cloud services. Accordingly, independent advice, and data supported insights can provide enterprises with confidence and clarity as they commit to the next wave of Microsoft products.

As Microsoft develop a modern commercial strategy to achieve economies of automation and consolidation, towards one product catalog, pricing engine and contract vehicle; the challenge for business and IT leaders is to retain negotiation advantage and assess quantative and qualative value, and enable spend management over the lifecycle of a contract.

But it’s also an opportunity for leaders in the market, to provide independent trusted consultancy services offering intelligence insights,  digital platforms and adaptive sourcing, and cloud spend management services, to answer the demands of the digital business. The Microsoft EA renewal remains a key moment to make decisions not only on adoption of technology, contracts, and sourcing, but how the cloud investment is managed and supported over the term to drive value and enable ongoing spend reduction.

Thanks All


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

 

Licensing Inactive User Mailboxes in Office365

For those keen eyed among you, may have noticed a single addition of “Exchange Online Inactive Mailbox” in the October Product Terms.

This addition is a new licensing change impacting all Office365 customers using Exchange Online Plan 2 features, or Office365 Enterprise E3 – Litigation Hold and Retention Policies – from October 1st 2017.

Updated October 3rd: The SKUs are in the October price file, and the “Exchange Online Inactive Mailbox” is included within the October Product Terms, but reportedly, Microsoft may be rolling back this change in an apparent u-turn. To be confirmed.

Updated October 3rd: Microsoft will postpone this licensing update for Inactive User Mailboxes in Office365. After publishing the Inactive User SKU to the October Product Terms and pricelists, with associated channel guidance, Microsoft are now suspending this planned licensing change.

The Inactive User Mailbox licensing change reportedly leaked in advance of general availability, and there was subsequent “negative feedback” at the MSignite conference. Redmond reportedly only made the decision on Thursday to postpone.

I will update this post once official comms are provided.

Updated October 4th: Microsoft have posted this to the Partner Ecosystem, confirming prior direct comms:

“Inactive User SKU and Shared Mailboxes Policy changes POSTPONED

Microsoft will be postponing the previous announcement regarding new Inactive User and Groups/Shared Mailbox policy changes. Current policies remain unchanged (i.e. 90 day license reassignment for Inactive Mailboxes and EXOP2 required for Retention and Litigation Hold on Shared Mailboxes) and no changes have come into effect on October 1, 2017. Please note, the new Inactive User SKU has been published on the October 1, 2017 Pricelist with plans to remove it by the November 1, 2017 Pricelist. Do not purchase this SKU.

Once a launch date is determined for these policies another communication will be shared.”

Inactive User Mailboxes

Inactive users (for example, users who have left an organisation) with mailboxes under Litigation Hold, and Retention Policies, are now required to have an “Exchange Online Inactive User” license.

To make a user mailbox “inactive”:

  • It must be assigned an Exchange Online (Plan 2) so that a Litigation Hold, or an Office 365 retention policy, can be applied to the mailbox (before it’s deleted).
  • Exchange Online (Plan 2) licenses are usually sold as part of an Office 365 Enterprise E3 and E5 subscriptions, or the expansive Microsoft365 E3 and E5 licensing packages.
  • If a mailbox is assigned an Exchange Online (Plan 1) license (which is part of an Office 365 365 Enterprise E1 subscription), you would have to assign it a separate Exchange Online Archiving license so that a hold can be applied to the mailbox, before it’s deleted.
  • Ref: https://technet.microsoft.com/en-us/library/dn144876(v=exchg.150).aspx

Inactive User Mailbox Update

  1. Microsoft will now charge for inactive mailboxes (from a customer’s next renewal) after October 1st 2017
  2. For customers who may have  possibly “thousands” of inactive mailboxes, you could engage with Microsoft to assess eligibility for a “1 year free trial” that can added to this service to the tenant. This has not been clearly defined, and subject to approval by exception.

Shared Group Mailboxes

Microsoft have had thus far, an inconsistent approach to the licensing model for shared resources under Office365:-

  • Under the prior licensing policy, shared mailboxes are assigned per user licenses to put on Legal-Hold:
    • “Shared mailboxes don’t have login credentials, so they are only accessible by licensed users who have been granted delegate access (full mailbox permission, send as, or send on behalf of). Note that Exchange Online Kiosk users don’t have delegate access, so they cannot access shared mailboxes.

      Shared mailboxes do not include a personal archive or legal hold capabilities. If you need these features, then you can purchase either Exchange Online Plan 1 or Plan 2 and assign it to the shared mailbox.” Ref: Exchange Licensing FAQs, October 2nd 2017

    • You must assign the shared mailbox to either an Exchange Online Plan 1 plus Exchange Online Archiving subscription, or to an Exchange Online Plan 2 subscription in order to enable In-Place Archive. A shared mailbox can’t be used to archive email for an organization, except for those messages that are sent from the shared mailbox or received by the shared mailbox.

      An In-Place Archive can only be used to archive mail for a single user or entity for which a license has been applied. Using an In-Place Archive as a means to store mail from multiple users or entities is prohibited. For example, IT administrators cannot create shared mailboxes and have users copy (via CC or Transport rule) a shared mailbox for the explicit purpose of archiving. Ref: Exchange Licensing FAQs, October 2nd 2017

  • Team Sites & Shared Folders were included with per user subscriptions.
  • To enable a shared mailbox to be placed on In-Place Hold, the customer must assign an Exchange Online Plan 2 license to it.

Ref: https://technet.microsoft.com/en-us/library/exchange-online-sharing-and-collaboration.aspx

Groups, Teams and Shared Mailboxes Update

  1. Shared Group Mailbox Update: Groups, Teams and Shared Mailboxes now include compliance and security functionality as long as 1 or more users are licensed for that functionality in the tenant.
  2. Microsoft still want all normal Users appropriately licensed. For example, if an admin wants to use Advanced eDiscovery across their organization.  All users required in the scope for the search should have E5 (or standalone equivalent) licenses, and the admin is also allowed to search all Groups, Teams, and Shared Mailboxes without additional E5/standalone licenses

The licensing requirements for ‘core’ compliance features are below:

Overview, inclusive of more advanced governance features:-

Summary

Microsoft are updating the Shared Mailbox and Inactive User policies to ‘simplify’ the licensing of these services and enable compliant usage of these services in Office365:-

  • The NEW Inactive User SKU, available on the 10/1/17 pricelist, will be available in EA, EAS, EES, Open, CSP and MPSA agreements (Ref: Product Terms, October 2017)
  • Existing customers will not be expected to begin purchasing this SKU until their next renewal, post October 1st.
  • This new SKU is intended to cover the cost of storage for archived or “inactive user” mailboxes and, to be compliant, customers will be required to purchase one SKU for every one archived mailbox (for Education customers, this SKU will be intended only for Archived Faculty/Staff Mailboxes).
  • Additionally, to lessen the complexity of licensing Shared Mailboxes, as of October 1st, Group/Team/Shared Mailboxes will include at no additional cost the compliance and security functionalities of the users in the tenant. As an example, if a tenant contains at least one Exchange Online Plan 2 user, the Shared Mailboxes in the tenant would be eligible for EXOP2 functionalities.

What is the Impact?

  • Inactive User Mailboxes are presented as an indicative cost of $3 Per User, Per Month (Microsoft Retail Price). The cost for every employee under data retention regulation, (over 7 years of retention): is circa $252 per employee.
  • For an average employee turnover of 15% per annum.  An average 1,000 user organisation would have an annual cost of  c. $5,400, and a total licensing obligation of c. $37,800 for 150 leavers over a 7 year retention period, for only that year’s leavers.
  • Microsoft do not accept use of shared mailboxes and transport rules to circumvent licensing policies. Conversion of users to shared mailbxoes for “genuine business purposes” is accepted.
  • Similarly, Microsoft do not accept merging of multiple user mailboxes, before creating an inactive mailbox.
  • Microsoft have a 90 day User Subscription License (USL) re-assignment restriction policy, and the end-customer is accountable for management of their licenses for joiners, leavers and movers.
  • If a customer only has F1 and /or E1 users, do not have the ability to set mailboxes to inactive without deletion of the mailbox data. To retain user data in a mailbox after the user leaves the company would require an ongoing F1 or E1 subscription, or assignment of Exchange Online Archiving, to set that mailbox on hold and ‘inactive’. This would enable re-assignment of the E1 or F1 license to another user.
  • If a customer only has F1 and /or E1 users, in order to place a mailbox on In-Place Hold, a customer must upgrade it to Exchange Online Plan 2 or purchase the Exchange Online Archiving for Exchange Online add-on.
  • If a customer only has F1 and/or E1 users they would need to purchase appropriate compliance feature licenses for those Groups/Shared mailboxes.

Working with MRP (Microsoft Retail Pricing), please see an estimated cost impact for a 1,000 user company. Please note, this is only using the Exchange Online Service Plan 2 MRP cost, and not optimimum pricing from CSP or EA programmes, but provides some insight for illustration purposes of how the costs of Inactive User Mailboxes on a per-user metric, over a 7 year retention policy:

Recommendations

  • Customer’s purchasing or renewing after 1st October 2017 should license Exchange Online “Inactive User” for inactive mailboxes, and will no longer need licenses for Shared & Group mailboxes for compliance features.
  • Ask for a quotation inclusive of ‘Inactive User Mailboxes’ from your Work with a Cloud Service Provider that can implement and manage your Office365 services via Cloud Support
  • Start reporting on Inactive User Mailboxes and go to the Security and Compliance Center> Data Governance for in-product inactive mailboxes reporting.
  • Ask for a quotation inclusive of ‘Inactive User Mailboxes’ from your Cloud Solution Provider (CSP) for your agreement(s).
  • Evaluate complementary third-party solutions that remove the inactive mailbox provision.
  • Inactive Mailboxes could enable and support GDPR, and remain discoverable, with data classifications and retention policies applied, providing a more complete data archiving solution.
  • For customers who may have a serious commercial impact of inactive mailboxes, you could engage with Microsoft to assess eligibility for a “1 year free trial” that can added to this service to the tenant. This eligibility has not been clearly defined, and subject to approval  from Microsoft.

The strategy will cause some pushback from customers, Microsoft are seeking to leverage their market dominance in email services to create an email archiving and storage business. The user metric would be scalable and profitable, but may be more failrly based on only a storage metric. It is possible that within 7 years of service, based on staff turnover and 7 year retention periods, organisations could be paying 20-30% of their email service costs per annum on archiving.

Thanks All


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

Microsoft Licensing and Services Update September 2017

Hitting Refresh

This week we have seen updates coming out of the MS Ignite conference in the US. Microsoft have announced Office 2019 ‘perpetual’ aimed at on-premises customers, expected in the second half of 2018, but how does this align with their wider ‘hit refresh’ strategy led by Satya Nadella, to deliver a $20 Billion run-rate cloud business?

Microsoft’s licensing models and commercial strategy greatly incentivise standardisation on an always-up-to-date platform for productivity and communication supported by the Microsoft Cloud. Microsoft exemplify this strategy through the cloud-supported Office C2R client with ongoing security and feature updates provided by Microsoft.

The new generation of cloud supported applications and operating systems act as a ‘traffic light’ that are switched on from ‘red, to amber and then green’. Under the traditional on-premises software model, access to new server features where accessed by upgrade of the Office client to the latest software version on a four or five year run lifecycle. Microsoft have increased this release and update cadence, with an extensive ecosystem of Office365 and Azure Identity Services accessed by Office, and Windows 10, and supported by SCCM, via a continuous service feature and support model, without end-of-support dates on a semi-annual release schedule.

To encourage upgrade of the Office ecosystem, Microsoft made a recent blog announcement  that as of October 2020, the traditional Office on-premise MSI application access to Office365 services will end at the expiration of “mainstream” support. Impacting customers limited to Office 2016 or 2013 releases and driving customers to ‘make a decision’.

Microsoft may have now confirmed a new MSI release of Office 2019 for next year, but importantly, are inferring this is targeted at customers who are running on-premises environments. Their support for “office perpetual” interoperability with cloud services, and the available programmes it will be sold under, remains to be seen.

Microsoft News

Some principle recent Microsoft updates, for September 2017 –

  • Microsoft announce Office 2019 “Perpetual” https://goo.gl/LZNtF3
  • Office365 Use Metering and ‘Reader Role’ designation for Usage Reporting https://goo.gl/m5Ptn1
  • Office365 Usage Analytics and will reach general availability in the beginning of 208, including new metrics on teamwork and collaboration, usage data for Microsoft Teams, Yammer, and Office 365 Groups https://goo.gl/m5Ptn1
  • Office365 Advanced Usage Analytics is also planned. Transmit the Office365 usage dataset to the Azure data store and join with user metadata from Azure AD. https://goo.gl/m5Ptn1
  • SCCM ‘Transition to Modern’ evolves from Windows10 and Office365 ProPlus, WSUS to WUfB, SCCM to Cloud Content Delivery, Win32 to Modern Apps
  • System Center release cadence, expect 1801 in 2018. Active Software Assurance for access to Semi-Annual channel.
  • Microsoft Azure competes with AWS with regional “Availability Zones” https://goo.gl/RZG1zB
  • Azure Cost Management services will be free for all customers. Microsoft Responds to demands of Cloud Spend Management https://goo.gl/cZGdEe
  • Microsoft EA (Enterprise Agreement) Azure cost reporting, enters preview  https://goo.gl/PBmtZN
  • Microsoft365 F1 a bold move to target a wider addressable market. At circa $10/u/m  and 2B users, you can see why https://goo.gl/WukgLu
  • Microsoft SQL Enterprise Edition SA and PowerBI Premium subscribers will access PowerBI report server https://goo.gl/jUzZh6
  • Microsoft announce SQL Hybrid Use Benefit to leverage SA for Azure SQL DB and discounted SSIS rates on data Factory https://goo.gl/M8gRWA
  • Azure SQL DB includes Database Managed Instance – offers managed PaaS  https://goo.gl/vkHpbS
  • SQL Server 2017 will be available for purchase in October 2nd https://goo.gl/rvU24Q
  • RedHat SQL offer – 30% off SQL 2017 subscription on Linux, and additive 30% off RHEL OS when purchased together https://goo.gl/bJS7aG
  • Microsoft announce Microsoft365 Education. New A3 and A5 flavours https://goo.gl/E1tQwo
  • Microsoft365 Education – A3 and E5. Office365 A1 also available. Compare plans : https://goo.gl/jjSb9j
  • Self-Password Reset and Writeback to on-premises AD is a popular Azure AD Premium P1 Feature. However, the licensing not enforced https://goo.gl/XhAxuN
  • Run a report to identify unlicensed users of Azure AD Premium i.e. users and apps using Conditional Access https://goo.gl/8VpiQn
  • New Azure flex CPU VMs “build burst credits” and access full vCPU when you need them: https://goo.gl/78mESL
  • Microsoft state direction of merging of Skype for Business and Microsoft Teams https://goo.gl/cyubH8
  • Skype Cloud PBX renamed to ‘Microsoft Phone System’, PSTN Services renamed ‘Calling Plan’ https://goo.gl/PxKdiX
  • You can now Restrict Windows 10 license reactivation and active state reporting to Microsoft https://goo.gl/8viqSt
  • Microsoft Teams – for users who leave the organisation, their chat history is maintained, with identity anonymised. https://goo.gl/v33KA2

Thanks All


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

Windows Server 2016 Per Core Ready

Microsoft have confirmed the launch Windows Server 2016 in October.

Windows Server 2016 is already available for evaluation since September 26 and will be on the October price list, with Volume licensing customers able to download fully licensed software at General Availability in mid-October.

Windows Server 2016 is a next generation operating system with cloud enabled security features, and ‘cloud ready’ protection of VMs. Microsoft have developed software-defined infrastructure features across compute, storage and network, based on an Azure model; and aim to support a cloud enabled application layer, with new ways to deploy and run existing and cloud native applications, whether on-premise on in the cloud, with new capabilities like Windows Containers and lightweight Nano Server deployment options.

Microsoft will depart from consistent feature parity between Windows Standard and Datacenter Edition for 2016, and some notable limitations on supported applications at GA. The new release will have over 86 new features and choices for deployment and service branches, with new management extensibility with System Center 2016 and OMS

Importantly, Microsoft will  re-align licensing from a processor to a per core metric, thus enabling a consistent licensing model across on-premise and cloud infrastructures, and securement of revenue growth by ‘riding the wave’ of the proliferation of cores at host level. The new pricing schema will equate the cost of a processor to 8 cores per CPU.

windows-server-per-core-cost-increase

Our Microsoft Advisory Services practice have completed some independent research which suggests a possible 22% spend increase at renewal, with a possible 4 in 10 servers already in excess of the pricing equivalent 8 cores per CPU, and a current host server average already estimated at 8.59 cores per CPU. This could represent a material increase in software spend at point of renewal, or over the next contract term, as hardware is upgraded with more powerful chipsets.

Microsoft have advised customers to complete an inventory and document the number of physical cores in each processor in use, that are licensed with Windows Server to ensure compliance. My team are already assisting our customers with a strategy to be ‘per core ready’ now, and save money by securing available license grants at SA renewal.

I recognise that the clients I work with are looking to drive licensing cost savings, and drive efficiencies by smart, tailored investment in cloud services. There is value in seeking expert advice to ensure a business is ‘Windows Server Per Core Ready’, enabling license spend reduction in Windows Server, securing available license grants, and identifying smart opportunities for hybrid or Azure investments.

There are also opportunities by identifying license spend optimisation, by looking at Azure Hybrid Use Benefit which to only require payment of the Azure base instance (up to 16 cores, and a minimum of 8) on Azure D Series VMs; and the expected ‘reserved compute’ option within Volume Licensing, allowing purchase of compute at a discounted rate versus hourly billing. Notably, Microsoft are expected to harmonise Azure.com pricing with both EA and MPSA to provide a more transparent and comparable offering with competitors like AWS.

Strategic partners, like SoftwareONE can also provide access to a digital platform to support intelligent management of cloud resources, with  PyraCloud Pro and a useful Azure consumption and analytics module. Enabling a business to on-board to cloud services with a “digital ready” management and analytics platform at outset, and avoiding the pitfalls of overage and service sprawl which are increasingly important to maintain the advantages of dynamic access to cloud resources.

In conclusion, the processor to core metric change will drive an increase in revenue based on prevalent emerging CPU architectures, driving double digit growth (as it did with SQL Server). The opportunity for customers is to be ready for this change and look at the immediate impact at renewal, but the wider strategy, inclusive of consolidation, upgrade and target candidates for cloud. There is a significant opportunity for spend reduction, but organisations need to align license design authority with technical design authority to drive effective and achievable spend reduction.

I will be running a series of webinars on Windows Server 2016 and these topics over the coming weeks:

  • Webinar Series (Thursday October 6th, Thursday October 20th) Register Here

Microsoft Resources


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee, or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

Enterprise Agreement True Up

Over the term of your Enterprise Agreement (EA), you can equip additional hardware, devices, or users with software and online services that you’ve already licensed, and then account for these changes through an annual reconciliation process known as “True Up”. If you have an Enterprise Agreement Subscription  (EAS), this process is known as an Annual Order, through which you can increase, or decrease your license subscription counts.

Once a year, you are asked to reconcile your Enterprise Agreement (EA) license quantities to account for the total number of licenses you’ve added in the previous 12 months. This effort culminates in an order you place (or an Update Statement you submit) that reconciles all the qualified devices, users, and processor/cores added or used by your organization over the course of the year.

Your annual reconciliation order (or Update Statement) are normally due 30 to 60 days prior to your Enrollment anniversary, supporting Microsoft and your LSP to provide eligible license transitions, but also both with annual commercial forecasts [Ref: Enterprise Agreement True-up Guide for more information]

A principle impact to organisations will be in the approach to the annual True Up. Updated wording in the 2014 contracts could significantly impact customers that have seasonal or other annual deployment fluctuations to impact the total cost of ownership (TCO) of a Microsoft Enterprise Agreement (EA). This new approach, effective for customers signing the more recently revised contracts is defined as follows for the Enterprise Agreement enrollment (This wording is reflected in the 2014 and 2016 Enrollments, but please refer to your organisations binding documentation):

“True-up Requirements. Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order. If there are no changes, then an update statement must be submitted instead of a true-up order.

(i) Enterprise Products. For Enterprise Products, Enrolled Affiliate must determine the number of Qualified Devices and Qualified Users (if ordering user-based Licenses)at the time the true-up order is placed and must order additional Licenses for all Qualified Devices and Qualified Users that are not already covered by existing Licenses, including any Enterprise Online Services.

(ii) Additional Products. For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the initial order, the last true-up order or the prior anniversary date and submit a true-up order that accounts for any increase.” 

For the counting of Enterprise Products, the wording in the enrollment does have an apparent conflict, that accounts for “any changes” over the term or since the last anniversary, but later also under the term Enterprise Products “at the time the true-up order is placed”. The common perception of many IT professionals was that the Enterprise Agreement offered some seasonal adjustment or allowance for temporary duplicate deployments, the revisited wording would clearly indicate a departure from a ‘trust based model’.

Taken in a wider context for customers renewing other enrollments, this tactical editing of the November 2014 Agreement Pack also extend to the Server Cloud Enrollment :-

“(ii) True-up order. Enrolled Affiliate must determine the maximum number of Products used since the latter of the initial order the last true-up order, or the Enrollment’s prior anniversary and submit a true-up order that accounts for any increase.” [Ref: Server Cloud Enrollment 2014]

This approach has been reflected in other guidance, including deployment of the Microsoft Assessment and Planning Toolkit (MAP):

“The Microsoft Assessment Planning (MAP) Toolkit features an IT-based Software Usage Tracker functionality that provides usage reports for the following server products: Windows Server, Exchange Server, SQL Server, SharePoint Server, and System Center Configuration Manager. This automated software asset management–related functionality is designed to be used by Microsoft Volume Licensing customers. The Software Usage Tracker provides you with a view of your actual server usage, which can be valuable for comparing with your purchased CALs, or for True-up and agreement renewal discussions.” [Ref: EA Program Guide]

Microsoft have also been advocating adoption of Software Inventory Logging Aggregator (SILA) which uses features within Windows Server 2008 R2 SP1 to Windows Server 2016 to collect licensable data from your environment on an ongoing basis. This will collect the following information over a period of time (not point-in-time).

  • CPU, Core and vCPU
  • Model and Type of CPU
  • Hyper Threading Enabled/Disabled
  • High Water Mark of Simultaneous Running VMs
  • High Water Mark of Simultaneous System Center Managed VMs
  • Host Locations of SQL VMs
  • Software listed in Add/Remove Program

This information is all incredibly important for capturing licensing metrics for SQL and Windows Server, and System Center. This could have a material impact of ESX Clusters do not have sufficient licenses assigned to support VMs across a cluster. It is strongly recommend you independently assess the impact of licensable VM distribution to identify any commercial risk for your organisation.

This change in written terminology may incentivise Microsoft to request metering of use over the contract term, or final year of a contract, to ascertain ‘maximum use’ therein driving revenues from final year True Up and subsequent renewal; underwriting the business case to move workloads to Azure. 

This audit centric adjustment to the contracts, is further extended under the MBSA (Microsoft Business and Services Agreement). The MBSA enables Microsoft to verify compliance with a third party auditor. If the auditor identifies more than 5% non-compliance, the organization will have to pay for the cost of the Audit, and 125% of the license price, based on the then-current price list a the customer price level (A-D) and not the agreed pricing of the relevant agreement(s). This can be problematic, not only due to the unbudgeted spend, but that non-compliance could be identified on non-strategic software. (For example, a ‘technical’ shortfall of Project or Visio deployed on a Citrix Environment, secured under AD Security Groups, which could impact the budget for strategic spend on Azure of Office365).

Recommendations

  • Check the terms of your enrollment(s), and any contractual amendments for your enterprise.
  • Microsoft expect either a ‘Zero True Up’, or a True Up declaration 60-30 days prior to the Anniversary.
  • The EA can become expansive when incorporating ‘managed devices’ and MDM and BYOD policies could extend the number of licensable devices under the Enterprise Agreement. So check the managed devices definition within the enrollment.
  • Please work with your existing toolsets, but I would strongly recommend both MAP and RV Tools for your SQL and Windows Server environment.
  • Optimum assignment of your Windows Server, System Center or Core Infrastructure Suite (CIS) CPU licenses can support with eligible core license grants for your subsequent renewal. There is some complexity in assessing the optimum license model(s) between CIS Datacenter and Standard Edition, or Individual Components, so I recommend soliciting specialist advice.
  • SQL Server remains a principle driver of unbudgeted spend, so I would recommend soliciting specialist advice to ensure optimum assignment of license assets, available license model(s), and ensure all optimum licensable metrics and licensable exclusions are covered. 

Thanks All


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

Hierarchy of Software Licensing Terms

image

“Copyright has two main purposes, namely the protection of the author’s right to obtain commercial benefit from valuable work, and more recently the protection of the author’s general right to control how a work is used.”

A Plethora of Resources

It is becoming critical for organisations to understand whether the written guidance on licensing relied upon to inform IT decision makers are considered influential or ‘binding’ by the software vendor.

An organisation may often refer to written guidance and specific terms extracted from a wide range of publicly available information published by Microsoft (and other 3rd party commentators) to support their interpretation and implementation of Microsoft Software. This becomes critically important when attempting to quantify risk (in preparation or in response to a vendor audit) or in assessment of the ‘real’ total cost of ownership of new technology choices.

An organisation’s hardware environment, software deployment footprint, processes and infrastructure topology and technology choices can all be impacted by Microsoft’s commercial licensing models. This may affect the outcome of a vendor ‘review’ or official audit or contribute to unmitigated risk when considering a merger, acquisition, divestiture or sale.

Accordingly, an organisation’s IT department may have referred to guidance from a plethora or resources to inform their approach, including but not limited to:

  • Microsoft Business and Services Agreement (MBSA)
  • Volume Agreement – Master Agreement
  • Volume Agreement – Enrollment
  • Product List
  • Product Use Rights  (PUR)
  • Microsoft Websites
  • Microsoft Training Resources
  • Microsoft White Papers and Licensing Briefs
  • Written statements by Large Account Reseller (LAR) or Enterprise Software Advisor (ESA) or Software Asset Management (SAM) and IT Asset Management (ITAM) or Independent Consultants.
  • 3rd Party White Papers, Licensing Guides, Websites, Blogs and Written Statements.
  • Responses in Online Forums and Wikis.
  • Oral guidance from trusted advisors.

In the current economic climate it is increasingly important to understand what software use terms, definitions, and explanatory guidance are ‘binding’ on your organisation. If this is understood, it is possible to start understanding the total and extended risk for your organisation. It is now estimated that 1 in 4 dollars spent on IT will be aligned to risk management.


The Hierarchy of Binding Documentation

The most important documents to refer to our the Volume Agreement(s) your organisation has procured licenses through and the Product List and Product Use Rights. These contract documents are considered by Microsoft as ‘binding’ upon your organisation.

It is important to understand what Microsoft Volume Agreement(s) your organisation has signed with Microsoft. This may include, but not limited to, Select Agreement(s), or Enterprise Agreement(s) or other specialist Enterprise Enrollment(s) along with any signed contractual amendments/exceptions

These documents, in conjunction with the relevant applicable releases of the Product List(s) and Product Use Rights documents for your deployed software, are your bespoke canon to understanding the appropriate software use terms for your deployed (and planned) software footprint.

image

The diagram below illustrates the subsequent precedence of the Product List  and then illustrates the hierarchy of software use terms within the Product Use Rights. Universal License Terms will remain in effect unless explicitly retracted or amended as specified in either the General License Terms or Product-Specific License Terms and Additional Terms within the Product Use Rights.

Getting a view of all applicable terms involves a ‘little bit of reading’ (I use this phrase lightly) especially If you have both current and prior releases deployed or are trying to map existing footprint versus post-consolidation, or future requirements.

The diagram below is intended to give a ‘high level’ top-down view as to precedence of ‘binding’ documentation. While not a definitive guide for all situations, it provides an overview of the hierarchical precedence of Microsoft licensing documentation and distinguishes between ‘binding’ and ‘non-binding’ advisory documentation from Microsoft and 3rd parties.

imageimage

While its recommend to look at the source documentation, as an example, the ‘License Mobility’ rules are further amended and defined at the Product-Specific level.

image


A Comprehensive Approach

Ultimately, appropriate licensing resources should be combined with a systematic approach to discovery, metering, management, analysis, optimisation and negotiation strategy to deliver the returns your organisations demands of It’s IT.

A systematic approach could include, but not limited to:

  • Balance of extended benefits and total cost of ownership against  Vendor “lock-in”.
    • Awareness of “lock-in” when reviewing procurement models.
  • Awareness of associated rights and benefits aligned to vendor licensing and maintenance programmes:
    • Awareness of associated Extended Software Use Rights
    • Awareness of associated Product Licensing Dependencies
    • Awareness of requirements for accessing Extended Functionality
    • Awareness of requirements for special Rights of Purchase
  • Comparative analysis of available Software procurement “Packages” and “Suites” reviewed against individual product/component based procurement.
  • Understanding Impact of respective Ownership and Service Levels of Service Infrastructure from Service Providers.
  • Understanding required accreditations and reporting obligations of Service Providers. Procurement Options dependent on the Service provided.
  • Availability and Analysis of Price Protection for committed spend  versus transactional procurement model(s).
  • Fast and flexible analysis of Procurement Models, Price Lists, Global Sourcing.
  • Vendor Procurement Contract Management
  • Full Software Asset Management (SAM) and IT Asset Management capabilities.
    • Advising on optimum datacenter implementation and consolidation strategy aligned to vendor licensing metrics.
    • Access to in-house expertise (not white labelled) and resources to support multiple vendor environments.
      (Some SAM Service providers do not have in-house knowledge for Multiple Toolsets or vendor licensing models)

    • While some SAM Service providers may recommend a toolset or combination of toolsets, are they inherently toolset agnostic?
    • Secondly, do they have the global vendor relationship to access a better price (and support) for discovery and metering toolset(s).
    • If your organisation is global, a SAM Service provider with local teams to access your worldwide  location(s).
  • Vendor Negotiation Support – look for a provider with a global reach. This will reveal intelligence across regions and vendor subsidiaries in terms of available exceptions and discounts.

If you would like to have a brief exploratory conversation, in confidence (or under NDA) please drop me an email or contact me on Twitter


A Question of Interpretation

As exemplified from this extract from the Product Use Rights, explanations within the binding documentation are often ‘limited’ and indeed, Microsoft themselves may be unable to refer to wording, explanations or definitions solely in binding documentation (Product Use Rights or Product List) when seeking to explain (or enforce their view). 

Microsoft does  provide guidance that where official contract definitions are unavailable that the contract terms should be interpreted under ‘generally accepted officially recognised English words defined and protected within’ but may ultimately determine unilaterally whether an organisation has used the software in a way that conform to the limited guidance within the binding contract documents. There remains no independent regulator for the software licensing industry (as advocated by www.clearlicensing.org)

It is the personal view of the author, that an organisation should ensure that the technical reality conforms to the reasonable IT industry interpretation of the terminology of the publicly available binding documentation (where specific vendor definitions are not publicly available) of the Vendor. However, this will have limited impact If the vendor takes a different perspective.

Advisory documentation rarely refer to source ‘binding’ documentation like the Product List or Product Use Rights and increasingly, it should be recognised that Microsoft licensing briefs, white papers and training resources, and 3rd party commentators, while useful, are not contractually binding documentation.

As an example, the Microsoft ‘Multiplexing Rule’ (see previous article)was created to  protect and maintain a proportional and scalable commercial licensing model; to ensure financial protection for the software vendor for their server product(s) that will not limited by “hardware or software you use to pool connections, reroute information, reduce the number of devices or users that directly access or use the product”.

[Ref: Product Use Rights, April 2013, Page 11]

However, the  ‘Multiplexing Rule’ when reviewed solely on the limited guidance provided in ‘binding’ documents like the  Product Use Rights could potentially be used to support the widest possible interpretation of those terms. Microsoft can apply this logic unless there is an explicit exception sourced from binding documentation. Microsoft will not have to consider written terms, explanations or exceptions sourced from non-binding sources (even those written by Microsoft) even If your organisation may consider reliance on Microsoft advisory literature to inform their software deployment as fair use.

As a hypothetical example, if a member of the public accesses a public website and enters information into a web portal of an ‘eCommerce company’, it could be deemed to “access or use the product” under the ‘Multiplexing Rule’ if that data is subsequently used by some internal SQL Server(s) for internal business analytics by the eCommerce company; the general public could potentially considered licensable as an ‘external user’ and licensable for the ‘access or use’ of the internal servers use for business intelligence.

While it may seem unlikely to your IT or Security Team that a member of the general public would “access or use the product” when SQL is deployed internally for soles purposes of business analytics of (for example, analysis of anonymous and aggregated user data – by internal eCommerce staff); the overarching precedence of the Multiplexing Rule as a Universal License Term  within the Product Use Rights and ‘limited’ guidance and definitions within the Product Use Rights or Product List could potentially support the ‘widest possible’ interpretation by the Vendor (and often does).

* It is unclear how this interpretation would impact the fair use of SQL 2012 Business Intelligence Edition sold and commercially licensed only on a Server/CAL metric to eCommerce organisations.

Final Thoughts

While it is accepted than many Microsoft licensing briefs, and websites may state that they are to be used as a ‘guide only’ (while often quoted by the Microsoft subsidiary to support their own view), the customer must ultimately look to the ‘binding’ terms and extrapolate how this could be interpreted, implemented and controlled for their current and planned environment.

It is now, more often than not, that non-binding advisory documentation is of limited influence unless it directly supports the ‘current’ view of the vendor. (There is no independent ombudsman or regulator to adjudicate that interpretation) . It is therefore recommended to extrapolate the ‘widest possible’ risk assessment of vendor interpretation of your deployed software footprint when evaluating and seeking to limit risk and cost associated with enterprise software.


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is a Senior Licensing Specialist at SoftwareONE

If you would like to book an in-depth Licensing Workshop / Microsoft Strategy Workshop please drop me an email or connect with me on Twitter

Tony lives with his wife in Oxford, England.


Disclaimer

This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft or other Software Vendor product.

This article is not intended to replace the Product Use Rights or Product List or other contractual documentation.

Please be aware that nothing on this website constitutes specific technical advice. Some of the material on this website may have been prepared some time ago, may have errors, and  may have been superseded. Specialist advice should be taken in relation to specific circumstances.

The contents of this website are for general information purposes only. Whilst the author(s) endeavour to ensure that the information on this website is correct, no warranty, express or implied, is given as to its accuracy and the primary author and website owner or it’s contributing Authors do not accept any liability for error or omission.

The contributing authors and owner of the website shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.

The information presented herein is intended exclusively as a guide offered by the author(s). The publishers product use rights, agreement terms and conditions and other definitions prevail over the information provided herein.


Open Focus – End User Computing

The Challenges

Organisations need to meet both the current and evolving needs of their employees and the provision and use of client computing services can be an emotive subject.

Within the organisation the objective of client computing is primarily to provide employees with the right level of access to corporate applications and data from a variety of access devices for a increasingly distributed and mobile workforce.

However, organisations are now asking how they define the “workplace”. The traditional on-site desktop environment now needs to evolve to include support for remote and mobile working, better collaboration and communication services; extending from traditional email and standard files shares to include presence, conferencing and social collaboration.

The challenges include meeting the expectations of the work force, who often have access to better technologies and services on personal devices than they have access to from work.

This isn’t just providing new devices to address expiring technology that has reached the end of lifecycle. Users expect communication+collaboration services that are comparable to what they have at home, allowing them to extend the working day seamlessly outside of the office.

Organisations have several drivers and challenges when looking at end-user computing:

  • Emergent collaboration and social tools are increasingly important to support an interconnected cross-organisational collaborative model.
    • Users are able to work across geographic or organisational boundaries with project based units, functions or teams.
      • Access to Instant Messaging, Collaboration and Presence Technologies.
  • Reduction of carbon footprint through technology – whether via device profiles or communication+collaboration tools.
  • Organisations are seeking to reduce time from the requirement to delivery (or self-delivery), with responsive agile IT service platforms.
  • Maintain support for required legacy applications.
  • Use of appropriate User profiles to support the correct level of provisioning.
  • Reduce Capital and Operational Spend where possible. “Get more for less”.

Gary Hammel (Business Thinker, Author) anticipated in 2006 that new collaborative and increasingly heterarchical organisations will mean:

“People are drawn to a community by a sense of shared purpose, not by economic need. In a community, the opportunity to contribute isn’t bounded by narrow job descriptions. Control is more peer based than boss based. Emotional satisfaction, rather than financial gain, drives commitment. For all those reasons, communities are amplifiers of human capability.” (Hamel 2006: 81)

Technology has become part of the essential fabric of the business, and competitive advantage. Organisation change programmes, whether Supply Chain or Operational often include an integral IT component.

The decision isn’t just an IT function, but is becoming part of a wider integrated technology investment that increasingly needs board oversight.


Software Procurement Considerations

Virtualization has decoupled this relationship of OS and Applications to the physical hardware and provides a more flexible and diverse opportunities for delivering end user computing.

image

Licensing for the modern end user computing is complex and entirely dependent on the context of the organisation and final technology choices. In the current economic climate, it has never been so important to minimise unnecessary spend.

Accordingly it is recommended to work pro-actively with a global licensing expert to get a holistic view, including but not limited to:

  • Balance of benefits and total cost of ownership against  Vendor “lock-in”.
    • Awareness of “lock-in” when reviewing procurement models.
      • Awareness of associated Software Use Rights
      • Awareness of associated Product Licensing Dependencies
      • Awareness of requirements for Extended Functionality
      • Awareness of requirements for Rights of Purchase
  • Comparative analysis of available Software Procurement “Packages”
  • Availability of Price Protection for committed spend  versus transactional procurement models.
  • Vendor Procurement Contract Management and consolidation
  • Full Software Asset Management capabilities.
  • Vendor Negotiation Support

Working with a trusted advisor has never been so important when evaluating strategic technology decisions and software license procurement.


Tony Mackelworth works at SoftwareONE and will now be providing licensing expertise through their licensing  services portfolio.

– Tony Mackelworth


Ref: Hamel, G. (2006) ‘The Why, What, And How of Management Innovation’ Harvard Business Review – February

How does the True Up Process work?

Over the term of your Enterprise Agreement (EA), you can equip additional hardware, devices, or users with software and online services that you’ve already licensed, and then account for these changes through an annual reconciliation process known as “True Up”. If you have an Enterprise Agreement Subscription  (EAS), this process is known as an Annual Order, through which you can increase, or decrease your license subscription counts.

Once a year, you are asked to reconcile your Enterprise Agreement (EA) license quantities to account for the total number of licenses you’ve added in the previous 12 months. This effort culminates in an order you place (or an Update Statement you submit) that reconciles all the qualified devices, users, and processor/cores added or used by your organization over the course of the year.

Your annual reconciliation order (or Update Statement) are normally due 30 to 60 days prior to your Enrollment anniversary, supporting Microsoft and your LSP to provide eligible license transitions, but also both with annual commercial forecasts [Ref: Enterprise Agreement True-up Guide for more information]

A principle impact to organisations will be in the approach to the annual True Up. Updated wording in the 2014 contracts could significantly impact customers that have seasonal or other annual deployment fluctuations to impact the total cost of ownership (TCO) of a Microsoft Enterprise Agreement (EA). This new approach, effective for customers signing the more recently revised contracts is defined as follows for the Enterprise Agreement enrollment (This wording is reflected in the 2014 and 2016 Enrollments, but please refer to your organisations binding documentation):

“True-up Requirements. Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order. If there are no changes, then an update statement must be submitted instead of a true-up order.

(i) Enterprise Products. For Enterprise Products, Enrolled Affiliate must determine the number of Qualified Devices and Qualified Users (if ordering user-based Licenses)at the time the true-up order is placed and must order additional Licenses for all Qualified Devices and Qualified Users that are not already covered by existing Licenses, including any Enterprise Online Services.

(ii) Additional Products. For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the initial order, the last true-up order or the prior anniversary date and submit a true-up order that accounts for any increase.” 

For the counting of Enterprise Products, the wording in the enrollment does have an apparent conflict, that accounts for “any changes” over the term or since the last anniversary, but later also under the term Enterprise Products “at the time the true-up order is placed”. The common perception of many IT professionals was that the Enterprise Agreement offered some seasonal adjustment or allowance for temporary duplicate deployments, the revisited wording would clearly indicate a departure from a ‘trust based model’.

Taken in a wider context for customers renewing other enrollments, this tactical editing of the November 2014 Agreement Pack also extend to the Server Cloud Enrollment :-

“(ii) True-up order. Enrolled Affiliate must determine the maximum number of Products used since the latter of the initial order the last true-up order, or the Enrollment’s prior anniversary and submit a true-up order that accounts for any increase.” [Ref: Server Cloud Enrollment 2014]

This approach has been reflected in other guidance, including deployment of the Microsoft Assessment and Planning Toolkit (MAP):

“The Microsoft Assessment Planning (MAP) Toolkit features an IT-based Software Usage Tracker functionality that provides usage reports for the following server products: Windows Server, Exchange Server, SQL Server, SharePoint Server, and System Center Configuration Manager. This automated software asset management–related functionality is designed to be used by Microsoft Volume Licensing customers. The Software Usage Tracker provides you with a view of your actual server usage, which can be valuable for comparing with your purchased CALs, or for True-up and agreement renewal discussions.” [Ref: EA Program Guide]

Microsoft have also been advocating adoption of Software Inventory Logging Aggregator (SILA) which uses features within Windows Server 2008 R2 SP1 to Windows Server 2016 to collect licensable data from your environment on an ongoing basis. This will collect the following information over a period of time (not point-in-time).

  • CPU, Core and vCPU
  • Model and Type of CPU
  • Hyper Threading Enabled/Disabled
  • High Water Mark of Simultaneous Running VMs
  • High Water Mark of Simultaneous System Center Managed VMs
  • Host Locations of SQL VMs
  • Software listed in Add/Remove Program

This information is all incredibly important for capturing licensing metrics for SQL and Windows Server, and System Center. This could have a material impact of ESX Clusters do not have sufficient licenses assigned to support VMs across a cluster. It is strongly recommend you independently assess the impact of licensable VM distribution to identify any commercial risk for your organisation.

This change in written terminology may incentivise Microsoft to request metering of use over the contract term, or final year of a contract, to ascertain ‘maximum use’ therein driving revenues from final year True Up and subsequent renewal; underwriting the business case to move workloads to Azure. 

This audit centric adjustment to the contracts, is further extended under the MBSA (Microsoft Business and Services Agreement). The MBSA enables Microsoft to verify compliance with a third party auditor. If the auditor identifies more than 5% non-compliance, the organization will have to pay for the cost of the Audit, and 125% of the license price, based on the then-current price list a the customer price level (A-D) and not the agreed pricing of the relevant agreement(s). This can be problematic, not only due to the unbudgeted spend, but that non-compliance could be identified on non-strategic software. (For example, a ‘technical’ shortfall of Project or Visio deployed on a Citrix Environment, secured under AD Security Groups, which could impact the budget for strategic spend on Azure of Office365).

Recommendations

  • Check the terms of your enrollment(s), and any contractual amendments for your enterprise.
  • Microsoft expect either a ‘Zero True Up’, or a True Up declaration 60-30 days prior to the Anniversary.
  • The EA can become expansive when incorporating ‘managed devices’ and MDM and BYOD policies could extend the number of licensable devices under the Enterprise Agreement. So check the managed devices definition within the enrollment.
  • Please work with your existing toolsets, but I would strongly recommend both MAP and RV Tools for your SQL and Windows Server environment.
  • Optimum assignment of your Windows Server, System Center or Core Infrastructure Suite (CIS) CPU licenses can support with eligible core license grants for your subsequent renewal. There is some complexity in assessing the optimum license model(s) between CIS Datacenter and Standard Edition, or Individual Components, so I recommend soliciting specialist advice.
  • SQL Server remains a principle driver of unbudgeted spend, so I would recommend soliciting specialist advice to ensure optimum assignment of license assets, available license model(s), and ensure all optimum licensable metrics and licensable exclusions are covered. 

Thanks All


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn


Disclaimer

  • This article is not intended to replace the Product Terms
  • This article is not intended to replace the Product Use Rights or Product List or Online Service Terms or other binding contractual documents
  • Please be aware that any licensing, or product information could be subject to change.
  • This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • This is not official guidance from Microsoft or its subsidiaries.
  • The following article is based on open information shared with Licensing Solutions Providers (LSPs) and based on  personal inference and understanding.
  • This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.
  • Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.
  • The contents of this document are for general information purposes only. Whilst the author endeavors to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.
  • The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.
  • This Disclaimer is not intended to and does not create any contractual or other legal rights.

 


Licensing Focus – Re-Imaging PCs

Many IT Pros may be looking at re-imaging their pre-installed OEM images with a standard image. However, It’s less clear how this works from a licensing perspective. I have included some of the rules around re-imaging your PCs and the caveats that you should look out for to not fall foul of mis-licensing.

Re-Imaging Criteria

  1. Volume Licensing customers who have licensed Microsoft software products from an OEM, through a retail source, or under any agreement other than their Microsoft Volume Licensing agreement may use copies made from Microsoft Volume Licensing media to re-image their devices.
  2. Re-imaging is permitted if the copies made from the Volume Licensing media are identical to the originally licensed product .
  3. Customers can use these copies from Microsoft media only if they are the same product and version, contain the same components, and are in the same language
  4. Re-imaging using the full version media requires that customers must also have licensed  full OEM or full FPP retail product
  5. Re-imaging with an "upgrade license", the device must have a full underlying OEM or full FPP retail license.
  6. If the customer has a FPP upgrade, and wants to re-image with Volume License Media, there again must be an underlying ‘qualified’ base license.
  7. Organizations do not have the right to reimage using OEM media.
  8. This must have the same Version, Edition, Components and Language

It is important to recognize that under the Microsoft Re-imaging criteria, the image must be the same product, for example Office Professional cannot be re-imaged with Volume License Media Office Professional Plus. (This is not considered the same product and does not have the same components)

This is explained in the Microsoft White Paper on Re-Imaging.

“The 2007 Office system sold through Microsoft Volume Licensing programs is an Enterprise Product with a different user interface, bypass enablement, and tools. Designed for enterprises, the 2007 Office system sold in Volume Licensing empowers IT administrators with tools for deploying, managing, and customizing the product, and provides end users with additional functionalities.” (Microsoft White Paper)

Microsoft view the Office Suite acquired under Volume Licensing as a different product. Conversely this does restrict how customers can re-image OEM with VL . (Since the versions must have exactly the same component products)

Do I have the right to reimage with a prior version of my licensed product?

You may reimage using a prior version if the license terms accompanying the software that you wish to reimage permit you to use a prior version in place of the licensed version.  Again, the eligibility requirements as stated above regarding product and version, components, and language apply.

Different components: The 2007 Microsoft Office system suites must have exactly the same component products. For instance, Microsoft Office Professional 2007 licensed through the OEM, system builder, or FPP channel and Microsoft Office Professional Plus 2007 licensed through Microsoft Volume Licensing are not the same product. They also do not share the same components. Therefore, you cannot reimage in this example.

Enrollment of OEM Office 2010 Licenses into Volume Licensing

Customers who want to buy Software Assurance for certain Office 2010 licenses acquired from an OEM may do so in the Open License and Select programs within 90 days from the date those licenses are acquired. Customers under Open Value may acquire Software Assurance for Office 2010 licenses within 90 days from the date those licenses are purchased (this does not apply to the Open Value company-wide option).

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By acquiring Software Assurance coverage for an OEM copy of Microsoft Office 2010, the customer is eligible to “step into” an equivalent edition of Office 2010 offered through Volume Licensing. This includes every application included in the Volume Licensing edition. The following table shows the mapping of OEM versions to Volume Licensing versions when Software Assurance is purchased.

Note: OEM Office Professional 2010 maps to Volume Licensing Office Standard 2010 rather than Office Professional Plus 2010. This is because Office Professional Plus 2010 contains several components (e.g., Communicator 2010, InfoPath 2010, SharePoint Workspace 2010 and the Advance Server Integration Features), that are not present in the OEM version of Office Professional 2007.

On enrolling OEM licenses into the Microsoft Volume Licensing Program, customers are eligible to purchase Step-up Licenses from Office Standard 2010 to Office Professional Plus 2010.

Microsoft Office 2010 Product Snapshot

Microsoft Office 2010 provides a wide range of powerful new ways for people to do their best work from anywhere—whether they are using a PC, Smartphone, or Web browser.* To provide customers with more flexibility to best meet their unique needs, Microsoft offers a variety of Microsoft Office 2010 suites.

The Microsoft Office 2010 suites available through Volume Licensing include:

  • Microsoft® Office Standard 2010
  • Microsoft® Office Professional Plus 2010
  • Microsoft Office 2010 suites available through Retail and / or OEM:
  • Microsoft® Office Starter 2010 (OEM only offering)
  • Microsoft® Office Home and Student 2010
  • Microsoft® Office Home and Business 2010
  • Microsoft® Office Professional 2010
  • Microsoft® Office Professional Academic 2010

VL Migration

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New PC

Office 2010 Starter – It comprises of Word Starter and Excel Starter. As pointed out earlier, this is a new SKU. Both applications it includes are limited-functionality, advertising-based ones. They are intended as a free alternative which will be pre-installed on new machines only (actually it replaces Microsoft Works), and will allow customers not traditionally paying for a new version of Office (or not ready to buy Office 2010 at the time of PC purchase) to try the new applications. It is licensed only for the PC it came pre-installed in, and it includes no installation media. Once again: It’s free of charge.

OEM and FPP and PKC (Product Key Card)

2010 Home & Student
– It comprises of Word, Excel, PowerPoint, and OneNote. It is strictly for non-commercial use. The concept behind this Suite is known from the same-name Office 2007 suite; when OEM or PKC it is licensed only to the PC it was sold with, while when FPP it can be installed in up to 3 PCs.

Office 2010 Home & Business – It comprises of Word, Excel, PowerPoint, OneNote, and Outlook. One thing to note is that Outlook no longer comes with the Business Contact Manager (BCM) in the OEM, PKC and FPP Office Suites; Outlook with BCM is only available in Volume License SKUs. As pointed out earlier, this is a new SKU; it is intended for home-based businesses and dual users. It is the entry-level commercial Office 2010 Suite.

Office 2010 Professional – It comprises of Word, Excel, PowerPoint, OneNote, Outlook (again, no BCM), Publisher, and Access. This Suite is the most upscale from the ones available outside of Volume Licensing.

Volume Licensing (VL) only:

Office 2010 Standard – It comprises of Word, Excel, PowerPoint, OneNote, Outlook with BCM, and Publisher. This is the basic Suite for businesses that have bought a VL program (requires at least 5 PCs).

Office 2010 Professional Plus – It comprises of Word, Excel, PowerPoint, OneNote, Outlook with BCM, Publisher, Access, InfoPath, Communicator, and SharePoint Workspace (formerly Groove). This Suite is optimized for server integration and is the perfect SKU for all the Exchange, SharePoint and UC capabilities. It features advanced IRM (first introduced in Office 2003), Instant Messaging and Presence.