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5 reasons to get VMware licensing right

Servers, Storage and Networking | Posted on April 16, 2018 by Arun Kirupananthan

Optimizing software investments isn’t exactly the most exciting topic for IT or the business. But that’s not to say it isn’t an important one. From cutting costs to enabling your biggest, most ambitious digital transformations, picking the right licensing model is an important step.

With more businesses heading to hybrid IT and virtualization, we explored the core benefits of VMware licensing’s biggest agreement for today’s enterprise.

How does the VMware ELA compare to other licensing options?

First, let’s take a quick look at the VMware licensing landscape. VMware currently offers three main models for volume licensing:

  • The Volume Purchasing Program (VPP) offers entry-level customers discounts for purchasing a minimum of $25,000 of VMware products. Customers accumulate points with each purchase and use those points for discounts on license purchases (between 4 to 12 percent off). These discounts cannot be used for support or subscription costs.
  • The Enterprise Purchasing Program (EPP) is for mid-level customers, offering better discounts and greater flexibility than VPP. Just like the VPP, EPP is a token-based system, where customers earn points and use those points for discounts. EPP has a minimum purchase order of 2,500 tokens (at $100 per token, that is a minimum purchase of $250,000). Unlike VPP, credits can be used for support and subscription, as well as licensing.
  • The Enterprise Licensing Agreement (ELA) offers financial and operational benefits that go beyond the per-product, transactional agreements of VPP or EPP. Typically, ELAs are three-year contracts that provide fixed-rate discounted licenses and support, including your existing and forthcoming maintenance and support needs. Unlike EPP or VPP, the ELA is paid for entirely upfront. Minimum enrolment starts at $250,000.

Five reasons to get a VMware ELA:

1.    Get significant discounts on support and licenses

Drastically cutting costs for services, support and licenses are the most obvious reasons to choose the ELA. Where VPP and EPP offer flexibility, ELA gives you much bigger discounts and benefits for your willingness to commit long-term. How much you end up saving depends largely on your negotiation. Customers typically save between 20 to 40 percent on the cost of subscriptions and support. Costs on net new license purchases can also be reduced by up to 40 percent. Compare those numbers to the maximum 12 percent customers can save on the VPP plan (which, again, does not give you any discount on support and services).

If you are likely to maintain the minimum $250,000 required, the ELA is almost a no-brainer. We say “almost” because it’s important you use all the software and services you are paying for upfront, avoiding shelfware. Determining how and if you will effectively use that upfront investment takes work, and likely the help of a third-party analysis. But, if you are sure you will continue to spend the minimums, then there is a clear business case.

2.    Build the business case for major digital transformation projects

Even if you are not hitting the minimums yet, many enterprises are actively planning for hybrid IT and virtualization initiatives that would make them eligible for an ELA. For example, if you are going to migrate a core database to the cloud, or virtualize your network with VMware, you will very likely be in the range of an enterprise agreement.

Simply put, if you are planning anything major that involves VMware technologies, you should look at the ELA as a way to build a business case, reduce your costs over time and get strategic with your licensing and services planning.

3.    Upskill your team and get access to third-party expertise, support, and mentorship

A major benefit of the ELA is that your support credits can be leveraged with your third-party technology partner, such as Softchoice, to unlock even more hands-on expertise, managed services, and IT asset management support. This is an attractive win-win situation, especially if your partner offers personalized advice, mentorship, and services beyond what’s available from VMware.

Keep in mind, it’s always easier to work with a qualified outsider when analyzing your existing install base and understanding your current and future licensing consumption needs. Having a team of experts on your side can also go far when negotiating the best deals and putting you in the driver’s seat when it comes time to sign the contract.

Many partners offer regular check-ups, optimization assessments and proven methods to manage your VMware licensing for the best returns, and lowest risks. Pursuing an ELA is an easy, often no-cost way to unlock those advanced services.

4.   Reduce global compliance risks

You can never have enough peace of mind when it comes to staying compliant, especially if you are a global organization, operating across numerous regions or from multiple clouds.

For VMware licensing in particular, ELA is the only large-scale agreement designed for global businesses. The EPP is restricted to region-based customers. Don’t forget, VMware uses a dedicated auditing team to research their customers’ license compliance. If you want to mitigate global license compliance issues, ELA is the best way to go.

5. Simplicity and insight into your spending

Aside from the hard costs saved on licensing and support, there’s much to be said about simplifying a complex and risky process. When you sign on for an ELA, you consolidate all your licensing across business units (and even subsidiaries) into a single, unified agreement. You also gain predictability in your spending, which will free your IT teams to plan ahead and make better judgment calls on future initiatives.

What next?

Enterprises considering an ELA have a lot to consider. It’s a hefty upfront commitment, but the payoff is often significant if done right.

The best place to start is at the beginning! Find out if your current VMware licensing is healthy, or if it needs a remedy. Download our Buyer’s Guide to learn more.

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