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The truth about Cisco Software Enterprise Agreements

Enterprise Software | Posted on May 1, 2019 by Lou Heil

CIOs and IT managers face many challenges when it comes to software licensing. And it’s no secret that this struggle results in unsatisfactory outcomes for IT operations, budget and resource management.

If you have a baseline of 1,000 knowledge workers and are still buying Cisco software licenses ‘à la carte’ read on to learn how Cisco’s Enterprise Agreement (EA) will dramatically reduce your licensing and support costs.

The problems with software licensing are complex and many.

Traditionally, an Enterprise License Agreement (ELA) was supposed to help companies simplify licensing management. But the growth of software providers created a complex web of license management. So complex that it confused even the most systematic organizations. According to this IDC study of software management, the top challenges for organizations are:

  • License management and optimization: Many companies have a huge legacy software footprint on-premise. And new cloud solutions added all the time. This mix of hardware and software vendor licensing makes management overwhelming
  • Contract terms and compliance: Imagine tracking and monitoring for mixed usage, contracts, terms, legal jargon, and clauses. It is not uncommon for licensing from the same vendor to start and end at different times. Often, with no real standard approach to co-termination (moving all licensing end dates to the same date).
  • Extra fees: Unfortunately, enterprise software is full of fees and penalties for on-premise and cloud customers. Usage audits and surprise fees often make up the dreaded ‘true-up’ conversation. A ‘true-up’ is a term coined by Microsoft. It is the reconciliation process that accounts and bills for the total number of devices you’ve added in the previous twelve months.

Many software vendors address these concerns by updating their license agreements. With a renewed focus on improving the customer experience across all levels of engagement. This means improved contract terms and conditions, more flexibility and advanced support services.

This is exactly why Cisco re-branded its Enterprise Licensing Agreement (ELA) as the all-encompassing Enterprise Agreements (EA)

This new policy applies to Cisco’s software portfolio of infrastructure, collaboration, and security software — including new solutions like The Network, Intuitive, Spark, and Umbrella. Below are the main features of the new EA.

With EA Cisco allows for 20% growth with no extra fees

To help manage unanticipated overages, you are entitled to an extra 20% of software and services over your initial quantity without extra charges. This applies throughout the life of the EA. If you do exceed the 20% threshold allowance at any time, your usage will be evaluated by the Cisco EA team for the contract going forward.

True Forward won’t charge for past usage

Unlike a ‘true-up,’ True Forward was coined by Cisco. It means that during the annual reconciliation of licenses added over the past twelve months, you will never be billed for any usages or overages that have happened in the past. You only pay for the additional licenses going forward. This is applied where you have exceeded the 20% growth overage on initially selected items and for any optional, additional software available under the EA. In either case, the EA will be updated to reflect the new usage level and you will only pay for that new level going forward.

All software will be licensed under a SINGLE agreement with the same terms and same co-termination across suites both on-premise and cloud

All agreements will be available for three or five years, and any mix of architectures or domains are allowed under that same contract. Any new EA will also feature not-to-exceed (NTE) pricing, a guarantee that you receive price predictability for products purchased under the EA, for the term of the EA –— regardless of software price increases over time.

Even though there is a minimum requirement, you will also get access to the Cisco Workplace Portal. This portal offers entitlement and support information for all purchased software. Also, under the EA you can get applicable network hardware with EA-covered software within that hardware provided at no cost. An EA truly allows you to bundle hardware and software together under your current EA.

Examples of money saved on licensing costs with an EA

One large organization needed a fully integrated, easy to use Cisco collaboration experience. Facing high maintenance and support costs in their existing telephony environment and tens of thousands of knowledge workers to please. Under an EA, they were able to take advantage of the benefits above and will save over $11M in the next five years.

Another enterprise that just hired 100 new employees at a new location needed twenty public space licenses and a couple of attendant console licenses. Purchased à la carte, it would have cost them tens of thousands of dollars in licensing and per-year support. Under the 20% growth option, they didn’t have to pay anything for the new technology being rolled out.

One large customer needed to reduce maintenance costs in their telephony environment. By migrating to an EA, they got to design a new meeting experience and estimate $11M+ in predicted savings over the next five years.

What to do next

To learn more about Cisco EAs I encourage you to download and read this brochure which will tell you more about how Softchoice and Cisco work together.

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