While the provider`s cloud-based offerings may be the future of its business operations, most of Microsoft`s customers are still operational and contractually bound to online deployments. There are a large number of possibilities for licensing and/or subscribing to Microsoft products. The provider or account representative of a given company may not be aware of all the options available. However, they are well trained (and motivated by incentives) to lead customers towards increased licensing costs. Make sure that you ask Microsoft`s licensing specialists how to better structure licensing for lower expenses and consider getting unbiased expertise to help the procurement team review recommendations. The EDOS program is ideal for large enterprises and government organizations with more than 5,000 users. An EA allows customers to subscribe to Microsoft online services such as Microsoft Exchange Online, SharePoint Online, and Lync Online. The services do not have to be licensed throughout the company, but can be reserved in addition for each user. The licensed customer is either the Standard Edition or the Enterprise Edition of each service. The duration of EDOS is three years and is linked to an EA. Changes in the current business climate, combined with Microsoft`s mission to relocate businesses to the cloud, are changing the way it does business with its largest customers. Companies considering renewing their corporate agreements or acquiring vendor offerings for the first time can use the strengths driving Microsoft`s behavior at the bargaining table. While the vendor injects its best-performing R&D, distribution, and marketing resources into the cloud, some of Microsoft`s enterprise customers are still bound by on-premise implementations operationally and contractually.
This has led the vendor to take aggressive steps to migrate these customers to the cloud. The results include several price and licensing changes, an increase in formal and informal licensing controls (often disguised as software asset management commitments), and increased contractual complexity and inflexibility. As a publicly traded company, Microsoft`s mission is to accurately forecast revenue. To do this, the company needs to have a clear overview of its sales pipeline and be able to make purchases and renewals faster and earlier in the quarterly sales cycle. There are a limited number of resources for legal desks and licenses to process these transactions, and it is almost impossible to process paperwork less than two weeks before a calendar year, fiscal year, or quarter-end. Managing these spikes in business volume is a challenge for Microsoft`s business, and delays in this pipeline can have a domino effect on quarterly and annual revenue, stock prices, and general market perception. Customers should take advantage of the supplier`s willingness to prevent spillovers and use purchases and lengthening periods accordingly. Contrary to popular belief, Microsoft could be more flexible in negotiations outside peak periods. The Enterprise Agreement, the price of which is based on the number of computers or users licensed, is a three-year agreement covering all software licenses and updates to a client system. In case of termination of the contract, it is possible to extend one or three additional years. If you`ve searched and aren`t able to reach an agreement, there are a growing number of licensing and subscription optimization challenges you face in dealing with Microsoft, as well as new costs, flexibility, and licensing/subscription opportunities that you can take advantage of.
As Microsoft continues its metamorphosis and business budget and usage requirements change rapidly, customers should prepare for a more demanding procurement and supplier management environment. . . .