Microsoft have announced some important licensing updates and price increases for August, and reflects an ongoing ‘carrot and stick’ methodology, to drive adoption of Office 365 and Azure. While many organisations are currently completing their renewals with Microsoft at the end of the MS financial year in June, some organisations with upcoming renewals over the next several months should factor these licensing updates and price increases into their renewal strategy:
- Price Increase in User Client Access Licenses (CALs), effective August 1st 2015, there will be a 13% price increase to User CAL. This will reflect a 30% price differential over Device CAL
The price increase will not immediately affect organisations committed to Core CAL or Enterprise CAL on a Enterprise Agreement (EA), or Enterprise Agreement Subscription (EAS), but will impact customers with renewals on or after August 1st 2015.
Microsoft have confirmed that Academic and Charity organisations will not be affected by the price increase in User CAL.
- Microsoft will remove System Center Client Management Suite (CMS) from the Enterprise CAL Suite,
- Microsoft have confirmed that product updates for System Center Client Management Suite will continue, and customers with active SA will continue to receive entitlement rights until December 31st 2016, as an exception in the Product List. Organisations that have committed to ECAL (with active SA), who are using or plan to deploy System Center CMS, will have time to transition, and Microsoft have reiterated that removal of System Center CMS from the ECAL suite does not imply that the solution is ‘End of Life’ for either CMS or the rest of the System Center ecosystem of products. CMS will continue to receive updates and will be available outside the ECAL
- After 31st December 2016, Microsoft have stated that System Center CMS will continue to receive updates, and would also continue as a stand-alone offering outside of ECAL
- Advance Threat Analytics (ATA) to be added to the Enterprise CAL Suite, an on premise software product licensed for Clients by a Client Management License (CML) on a Per User or Per OSE Model. The General Availability for ATA will be available on August 1st 2015
- ATA will also be included as part of Enterprise Mobility Suite and Enterprise Cloud Suite (ECS) on a Per User model on August 1st 2015. Existing EMS customers will automatically receive entitlement rights to ATA upon General Availability.
- Microsoft have stated that ECAL price was not increased due to inclusion of ATA (ATA will be available as a standalone solution)
- The EMS ‘Add On’ for ECAL SA will not include ATA, as the entitlement rights to ATA are included in the ECAL Suite.
- Price Increases for Enterprise Mobility Suite (EMS), Microsoft have increased the Core CAL Per User and Per Device ‘Add on’ by 27%, 15% for organisations buying a ‘Full’ USL, and 4% for organisations purchasing a From SA USL.
- There is no increase for EMS ECAL (Per User) ‘Add On’, (but a 7% increase on the EMS (Per Device) ‘Add On’).
- Microsoft have confirmed that Azure Rights Management Service (RMS), will be re-branded as Azure Rights Management Service Premium.
- Microsoft have sought to differentiate Information Rights Management (IRM) in Azure RMS Premium from the native IRM in Office365, by offering a new “Document Tracking” feature to allow tracked sharing of sensitive files. Microsoft will not be increasing the price of Azure RMS Premium, and this will continue to be available as a stand-alone service.
- Microsoft have announced that MDOP will now bundled into the Software Assurance for Windows, a tactical move to maintain Software Assurance (SA) business for organisations to maintain SA on Windows 10.
- The Windows SA price has been increased to match the ‘combined’ price of Windows SA and MDOP. This is represented as an 11% increase for Windows SA (Per User) USL due to the perceived value of MDOP
- The Enterprise Cloud Suite (ECS) will benefit from the inclusion of ATA, Azure RMS Premium and MDOP.
- The Enterprise Cloud Suite (ECS) price will increase by 5% for a ‘Full’ USL and 3% for a ‘From SA’ USL.
- Microsoft Enterprise Cloud Suite (ECS) ‘Add On’ will also see price increases, with a 10% increase in (Per Device) Core CAL ‘Add On’, and 7% for the (Per User) Core CAL ‘Add On’ , 3% for the ECAL (Per Device) ‘Add On’, but notably a 11% decrease in ECS Per User ECAL ‘Add On’ to balance ECAL User CAL Price Increase.
- Microsoft have also announced a licensing update to the ‘Bridge CAL’ for Office 365. Commonly providing access to on premise solutions including Windows Server CAL, System Center Configuration Manager (SCCM) CAL, System Center EndPoint Protection (SCEP), and Windows Rights Management Services (RMS).
- The ‘Bridge CAL’ now includes Advanced Threat Analytics (ATA)
- Effective August 1st 2015, ‘Bridge CALs’ are only available on a Per User model. Microsoft state that the majority of ‘Bridge CALs’ are purchased on a Per User model, and this standardization would ensure a consistent ‘Per User’ licensing model for Office 365 .
- Microsoft have provided a ‘grace period’ under the Product List for current customers, to allow organisations to continue to purchase Per User ‘Bridge CALs’ based on their device count. This Product List exemption will provide a “per device rights extension” for the current term of the contract.
- Effective August 1st 2015, ‘Bridge CALs’ are only available as a Subscription. Microsoft have eliminated all License & Software Assurance (L&SA) and Software Assurance Only (SA) SKUs from the Product List. Microsoft have sought to consolidate the number of Bridge CALs by limiting to a Per User Subscription model, but notably, customers will only receive perpetual rights to the then-current version of the software at renewal. Upon renewal, organisations will no longer receive perpetual rights to the components of the Bridge CAL.
- Microsoft will maintain a Platform Discount for organisations that are eligible, but the ‘From SA’ MSU SKU will be price the same as ‘SA Only’ price providing price parity, but without a perpetual use right.
- Microsoft have also stated that New MSU will be cheaper than the L&SA ‘Added at Signing’ price (accounting for the 13% User CAL Increase), and an estimated 20% more than the ‘From SA’ MSU SKU.
- Effective July 1st – Microsoft combine PUR and Product List into Product Terms, new monthly release cadence. FAQs http://goo.gl/cYq2yD
- Microsoft has revealed that the final releases of Visual Studio 2015, Team Foundation Server 2015 and .NET Framework 4.6 will be available for download on 20 July http://t.co/wbLDxjbtO1
Your Microsoft Renewal
With these price increases in mind, and the business demand for cost savings, cost avoidance and mitigation of commercial risk, and effective vendor management require a systematic approach in your Microsoft renewal. The requirement to develop an optimum software licensing strategy are increasingly complex. This includes, but is not limited to, vendor price increases and licensing updates, updated licensing models and metrics, proliferation of multiple device types, diverse user profiles, management of software demand, ‘bring your own device’ and work mobility. Considerations like desktop and application virtualization delivery models, complex virtual server environments and adoption of cloud services, have seen critical changes in licensing models from software vendors, and ongoing utilisation of licensing, pricing mechanisms and increased audit activity to drive customer purchasing behaviours increasingly require a pro-active and considered approach.
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