Faster Delivery = Happy Users
Automated Process = Fewer Errors
Standards = Cost Reduction
Order Visibility = Confidence
Linking Systems = Efficiency
The reality is a licensing strategy developed three years ago is almost certainly not optimized to meet the needs of the business today. That’s why organizations are taking steps to modernize their licensing strategy by leveraging new options to reduce costs, risk and maximize the impact of their Microsoft technology investments.
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Azure public cloud services are among the most important we deliver. But no two Azure customers are alike. Each comes to us with specific motivations for adopting public cloud.
Some want to lower costs. Others want to enable innovation and competitive advantage.
Some expect to adopt the public cloud with predictable, year-round usage. Others may need to consume Azure services in short bursts. While the specifics may vary, our clients turn to us to help them use Azure to meet their over-arching transformation objectives.
We’ve found the ways customers engage us for Azure services are analogous to personal travel: The car may be the method of choice for many. But some rent, while others prefer to own. Some may lease or own a vehicle at home but use other methods when traveling.
In the article below, we use the analogy of the car to illustrate the three most common usage models for our Azure services and the customer preferences that motivate them.
The “Lease” – Server Cloud Enrollment (SCE)
For many drivers, most day-to-day travel takes place within a 45-to-60-mile radius from home. Routine trips to the office, the grocery store and driving the kids to school travel along fixed routes and yield a predictable annual mileage.
In this scenario, leasing a vehicle yields the best overall cost and convenience. There are some drawbacks – the leaseholder is responsible for fuel, insurance payments and ongoing maintenance. But the lease covers maintenance and warranty coverage direct from the dealer.
For our Azure customers, this pattern of usage aligns with the Server Cloud Enrollment (SCE) model. Here, the client makes an upfront commitment to spend $12,000 per year. Microsoft ensures the functionality of Azure’s underlying data centers and services. Like the vehicle leaseholder, the client leases that infrastructure with a predictable amount of usage in mind.
The “lease” model works to the best advantage of organizations with common, repeatable patterns of IT spend and usage. As such, many of our Microsoft enterprise agreement (EA) customers fit this model. Just as the leaseholder may choose where and from whom to buy vehicle maintenance services, SCE customers may acquire managed services as needed. For example, migration services of managed services as their needs or strategy dictate.
The “Rental” – Pay-As-You-Go
Let’s imagine our hypothetical driver travels to other cities in North America on a regular basis. In this scenario, driving a leased vehicle across the continent would be impractical. Instead, they choose to fly and rent a vehicle when they arrive.
In this case, they find similar traffic laws and patterns to those in the city where they live. They still drive the car themselves and cover insurance payments. They need to provide fuel and know the route to their destination. But they don’t have to take care of maintenance, cleaning, repairs or other responsibilities of owning a car.
The rental scenario is analogous to a Pay-As-You-Go model of Azure procurement. Under a pay-as-you-go engagement, a customer will pay for public cloud services only for the time they’re needed. Just like renting a car, the client only needs to have the credit or cash on hand to pay for the services used in a given term.
This type of Azure engagement appeals to customers with less predictable usage patterns or those who need to support burst consumption for shorter periods of time. These include customers with smaller levels of public cloud consumption or those experimenting with new applications and services. Committing to $1,000 in cloud spend per month to cover a short period would be just as impractical as buying a new car for a week’s worth of business meetings in another city.
The “Ride-Share” – Cloud Solution Provider (CSP)
In the last scenario, our driver travels overseas once or twice a year. In this case, unfamiliar geography and traffic laws mean renting is less-than-ideal. Instead, the driver uses a ride-sharing app such as Uber to get to each destination.
Here, the destination is the only concern. Someone else – the Uber driver – worries about fuel, navigation, the rules of the road, insurance and repairs. The overall cost may be higher than renting or owning a vehicle. But the gains in convenience and peace-of-mind that comes with someone else worrying about the details are often worthwhile.
The ride-share scenario aligns with the Cloud Solution Provider (CSP) model of Azure procurement. The CSP builds on the Pay-As-You-Go model with value-added services provided by Softchoice. These include dedicated support to identify and remediate issues, unlimited mentorship for guidance on configuring cloud services or migrating actual workloads as well as monitoring and cost-optimization services. These services help customers reduce the learning curve and achieve their cloud objectives faster.
This type of engagement appeals to customers who may have predictable multi-year workloads as well as a need for rapid scaling based on hours, minutes or seconds of usage. We provide managed services while Microsoft delivers the actual Azure services. In the ride-share analogy, this is akin to the way an individual vendor provides driver services while Uber provides the app and payment system.
You Can Drive My Car
A driver may lease, rent and use ridesharing apps depending on specific needs and scenarios. In the same way, there is no set limit to the ways they consume Azure services.
For many organizations, scaling the purchase of cloud services in direct correlation with the income they earn from them is the ideal. Although there are customers who fit all three usage models, the Azure CSP model is fast gaining momentum among our customers – including those already on SCE or Pay-As-You-Go plans.
This is no surprise, as the Azure CSP provides customers with an affordable way to achieve their business goals while reducing the risk of the unknown. Just like the ride-share model, when they need a ride they get one – and let us worry about the details.
If you’re like most organizations, your Microsoft Enterprise Agreement (EA) is one of your largest IT expenses. It has likely served you well for years (or decades), providing discounts for standardizing on Microsoft.
But IT environments have evolved and — with the shift to the cloud, and the lifecycle of software solutions and new features — licensing has become more and more complex. Innovation doesn’t occur in three-year cycles. So, it’s time to ask, is an EA still right for you?
That’s the question posed by Luke Black, Softchoice senior manager of Microsoft programs and our cloud lead Jason Cooper in the recent webinar Evaluating Microsoft Enterprise Agreements. The co-hosts looked at whether, given the technology changes and new licensing options available, an EA remains your optimal licensing choice.
“The EA continues to be a popular solution for many organizations and has been imitated by many software companies who have come since. But the landscape of how organizations license technology is evolving,” Black said.
“Culturally, we are moving to a subscription or consumption economics model, at the organizational level all the way down to individual consumers.”
While an EA may still be the best choice for some organizations, Black stressed it is time to take stock of the pros and cons of the options now available. He pointed to three high-level challenges that legacy licensing models put on organizations:
Organizations today are, of course, not limited by the choice of simply signing an EA or not. For organizations moving to the cloud, there are three valid approaches to licensing: Pay-As-You-Go, an EA based on a Server Cloud Enrollment (SCE) and the Cloud Solution Provider (CSP) model. Each model lines up with an approach to software purchasing and your specific business needs.
The Pay-As-You-Go model is a credit/debit card-based approach generally used by organizations with relatively small cloud consumption. It’s flexible and supports burst consumption for a month or two, or to try new services.
The SCE model requires an upfront commitment to consuming a minimum amount of Azure services annually. It may seem like a small amount but can lead to concerns around whether it’s right-sized for the organization’s consumption.
The CSP model discussed in the webinar is a pay-as-you-go approach managed by your partner. In the case of Softchoice, this means having full partner support around cloud deployment and management, as well as mentorship and cost optimization to help clients achieve their cloud objectives.
Microsoft developed its Cloud Solution Provider (CSP) partner program to meet the needs of today’s IT environments. It provides organizations with a flexible, cloud subscription model for customers to buy Microsoft cloud solutions — such as Office 365 and Azure — with full partner support. A modern licensing platform must be built with the cloud in mind, Black noted. And that underlying platform must be connected and seamless. (Which Microsoft has done.)
Engaging a CSP partner helps to overcome one of the most significant challenges with moving to the cloud: uncertainty.
“One characteristic of procuring, implementing and managing cloud (among many others) is a degree of uncertainty that comes with change,” Cooper said. To counter this, a CSP agreement gives “unprecedented levels of control deploying and fine tuning” Azure and Office 365.
With the concept of volume licensing basically eliminated in a CSP agreement, users are onboarded and offloaded based on business needs, and IT consumption is adjusted to match.
(Watch our video to learn more about the differences between EA and CSP models.)
Organizations looking to operationalize their costs with cloud service flexibility would benefit from investigating moving to a CSP model, Cooper suggests. He said beyond its licensing advantages a CSP agreement can help organizations to:
While an EA model might still be right for your organization, in today’s evolving IT landscape it is no longer a given. A more modern approach to licensing that mirrors the way your organization now consumes IT may be in order. A good CSP partner can help you achieve operational excellence, overcome cloud skills gaps, and better manage cloud costs.
The last thing anyone wants during an audit is a surprise.
Simple mistakes, like using technologies without a full understanding of how they affect licensing, can result in unintended consequences and unforeseen costs.
What many fail to anticipate is how changes to their environment, even those not directly related to licensing, can have a major impact. Turning on high availability, backing up systems to the cloud or even moving workloads to the cloud could have consequences many are unaware of until an audit is conducted.
Proactively self-auditing beforehand goes a long way in avoiding or mitigating unforeseen costs. Here are four best practices that will help keep you prepared.
The first thing you need is a tool that can produce the necessary data points that would be required in the event of an audit. Software inventory or asset management tools will give you insight into what is currently running in your environment.
These tools provide you with information such as:
While this information is great, someone still needs to compile, analyze and understand the implications. You also need to be careful and ensure the outputs from these tools accurately reflect what is going on in your environment. Something as simple as confirming that naming conventions are correct is critical in identifying gaps between what you are entitled to and what you have installed. Make sure you’re able to distinguish between physical and virtual machines since each has a different licensing impact. For the same reason, you also need to understand whether a server is active or passive, production or backup.
The second step is a summary of what you have actually paid to use. You should have the most recent version of your Microsoft License Statement (MLS) report or volume licensing inventory. Make sure that it is inclusive of acquisitions, licenses inherited from other companies such as OEM licenses, full package product, and non-contractual volume licenses. This can be obtained by asking your License Service Provider (LSP) to request it from Microsoft.
Proper proof of purchase for anything obtained outside of volume licensing, such as retail and OEM licenses, is also important to have.
What surprises customers most during an audit is often the extent of expertise required. The reality is that you’ll likely need access to functional experts to explain how each technology is being used. For example, if you’ve got a large SQL environment, you may need to bring in a SQL developer to explain exactly how the SQL servers are being used or accessed, since this affects the type of license required.
Make sure you know who is knowledgeable in each area of your environment. Also, take the time to know how the technologies on end-user devices are being leveraged.
Once you’ve got these pieces in place, it’s time to determine who will actually help explain the licensing rules and how they apply to your organization’s requirements. Most companies don’t have licensing expertise internally, which is where a trusted partner comes in. Leaning on the vendor is a critical mistake since they are deeply partial. The better approach is to use a trusted partner who can provide the objectivity necessary to right-size your licensing to minimize cost and compliance risk. Finding a partner that can also make technology recommendations alongside licensing considerations is critical.
See what 5 qualities we think are most important when evaluating a partner in our article “The 5 Most Important Things to Expect From Your Microsoft Licensing Provider“.
Microsoft is introducing sweeping changes to their licensing programs this month. With the continued shift to Cloud, Microsoft has also increased the tempo of new product releases. With so much change, it is difficult to know what will affect your business, licensing compliance and, more importantly, how.
Many organizations see their Microsoft costs continue to increase yet, at the same time, feel like their risk and time spent managing licensing are also rising. You aren’t wrong in thinking so. Microsoft has doubled their number of products in the last 6 years. All while introducing new licensing programs and requirements. The truth is a licensing strategy created just three years ago is most certainly no longer optimized for your environment today.
Did you know there are over 300 ways to license O365? With so many permutations, you have to ask yourself: do you think you have analyzed the most cost and risk-averse way to license every product in your environment or on your roadmap? What process do you have to keep that strategy current?
The shift to the cloud means non-compliance is becoming easier for Microsoft to identify, increasing the possibility of penalties. In fact, Gartner estimates major software vendors such as Microsoft audited 64 percent of organizations in the last year alone. Of those, 88 percent incurred unforeseen costs averaging more than 20 percent of their annual subscription and maintenance spend.
Product changes affect usage rights and support as new versions come to the fore and older ones are retired. This means shorter timeframes to understand the implications for your business. In some cases, these changes require you to move quickly to the latest version in order to maintain compliance. Many of the most significant announcements also come after Microsoft year-end in June – well after most organizations have already renewed their contracts!
A Microsoft Enterprise Agreement (EA) is no longer the only way to license your technology. In some cases, it may not even be the best option for you. This is particularly true for cloud-based products and services. For example, many organizations have a point-in-time need to leverage public cloud offerings like Azure, perhaps for testing and development projects. In this case, ‘pay-as-you-go’ may make more sense than making an upfront Azure commitment through your EA. Others may need more robust support as they integrate cloud computing into their digital and workforce transformation efforts. In this case, the Cloud Service Provider program, which bundles in services like Keystone Managed Service is a good option to ensure you are able to leverage Microsoft technologies to drive specific business outcomes.
Finding time and expertise to optimize your licensing in such a dynamic environment is challenging to say the least. You not only need the tools, but also the program knowledge to identify the most prudent purchasing solution. It is little wonder most organizations lack confidence in their ability to maintain compliance and avoid overspending.
This is why businesses across North America are looking to modernize their licensing strategy. They are right-sizing their spend by leveraging newer and more adaptable licensing options, and keeping that strategy current with proactive processes and supporting resources, typically with the help of a 3rd party provider.
Working with a License Service Provider (LSP) helps you understand how changes to Microsoft technology affect your business. You’ll receive expert guidance on options to maintain compliance and prepare for the introduction of new products and services. A good partner can help you avoid surprises, maximize your budget and increase the impact of Microsoft technology on your business.
The number of Microsoft products has more than doubled over the past six years, introducing new purchasing programs and requirements in the process. The reality is, a licensing strategy developed even just three years ago is almost certainly no longer optimized for today. Remaining compliant has become a moving target. If you’re not moving with it, you’re putting yourself at risk of increased cost and compliance risk.
Here are five things your License Service Provider (LSP) should be doing to keep you compliant and ensure you only pay for the services you truly need.
When it comes to licensing, organizations are often inundated with information from a variety of sources, making it difficult to know what’s relevant. In April of 2018 alone it was announced that 14 products were ending extended support. Unsupported technology could pose security risks or compel you to upgrade to a different version earlier than you might have planned. Having a regular process to review this information and understanding the direct impact on your business is critical.
Your Licensing Service Provider (LSP) should be meeting with you on a regular basis to highlight any major changes that could affect your environment. Specifically, they should provide you with insights into the following:
This on-going communication is the cornerstone of efficient license management.
Regular, structured reviews equip organizations with the information they need to make the right choices, and ensure they’re using what they’re paying for, rather than just what’s installed.
We find that many organizations purchase bundles that include software they don’t necessarily need. When we take a deeper look we often find that many are paying for overlapping technologies. Consolidating these tools is a great opportunity to save money.
Downloading a trial of a premium product for a single use case can result in unintended consequences. So long as that product is installed, the organization is required to pay for licensing. Determining whether an employee is actually using the software is a good indication of whether it’s worth paying for. Or whether it should be reallocated to another individual.
These insights are essential to cutting unnecessary costs and making better use of your licensing investments.
The reality is a licensing audit isn’t out of the realm of possibility. Gartner estimates major software vendors such as Microsoft audited 64 percent of organizations in the last year alone. If you’re not doing a formal, independent review of your licensing position, your organization could be subject to an unpleasant surprise.
Rather than having Microsoft interpret your results for you, it’s important to have third-party expertise in your corner. An LSP can advocate on your behalf and make recommendations based on use cases, and inform you of where you might be over-licensed. A software vendor is unlikely to help you cut costs during an audit, making it vital to have a trusted expert on your side.
With the pace of program changes, regular audits can also create positive opportunities as well. Beyond ensuring compliance, this includes right-sizing licensing investments, as well as planning effectively for upgrades and new technologies.
All licensing contracts have important milestones. Unfortunately, many of those milestones are ignored or forgotten until the last minute. Rushing the process, however, puts you at a significant disadvantage. Your renewal completion target date should be 45 days prior to your expiration date – not when you start evaluating your agreement.
Failing to perform a formal analysis of what’s installed and what’s being used well in advance of your renewal date makes it difficult to evaluate your options strategically. It also puts you in a poor negotiating position. Your provider should be able to build a proper roadmap. This includes appropriate milestones such as when your true-up order should be submitted, when a cost analysis of your renewal configuration should be finalized, as well as assignment planning for any remaining Software Assurance (SA) benefits you have yet to use.
By starting 6-months in advance you and your provider should have enough time to do a formal audit, provide a usage report, analyze it and inform your licensing recommendations using all available options. This ensures you are planning optimally and making effective use of your benefits and entitlements before they expire.
Organizations sometimes fail to understand the money left on the table for support, training, and implementation when they don’t have a clear understanding of how to take advantage of their SA benefits. Software Assurance benefits are use-it-or-lose-it, and many do not appreciate the real dollar value attached to them.
These benefits include software and technical support, technical and end-user training, implementation, and planning services. It is therefore important to review your SA benefits to ensure they are being properly utilized.
As the world of licensing continues to change, and more options become available, it also becomes more complicated. Your partner should be proactive in their management of your licenses and continually bring insights into your use and optimization to keep costs in check and maximize the impact of Microsoft technology on your business.
This week, the Softchoice team is on the ground in Las Vegas attending Microsoft Inspire 2018 –Microsoft’s biggest partner conference. We’re bringing you the latest news and announcements. See the Day 1 recap here.
Kicking off Day 2 of Microsoft Inspire 2018, Gavriella Schuster, Corporate Vice President, One Commercial Partner, hosted a keynote and shared some exciting news about One Commercial Partner and expanded opportunities for partners like Softchoice to co-sell with Microsoft.
We also heard from Jason Zander, Executive Vice President of the Microsoft Azure Team in the Cloud and AI Group, and Ron Markezich, Corporate Vice President of Microsoft Office 365, about new initiatives that will help us achieve digital transformation for our customers.
But for Julija Noskova, our VP of Marketing, the second day of the conference was really about diversity and inclusion (D&I), a key strategic priority for Microsoft and for Softchoice. Julija attended an amazing IAMCP Women in Technology Luncheon, where women like Gavriella Shuster, Corporate Vice President, Commercial Partner Channels & Programs at Microsoft, Julia White, Corporate Vice President at Microsoft, and Kathleen Hogan, Executive Vice President of Human Resources at Microsoft, shared their stories, struggles and career experiences. From what Julija tells me, it was a truly inspiring event for her and the one thousand plus women in the audience. Satya Nadella also joined the event as a special guest and shared his views on D&I. From what I hear, his authenticity and belief in building a more inclusive Microsoft were simply contagious. Satya is clearly an example to many CEOs on putting theory into practice and championing D&I.
I am excited to see what else Inspire has in store for us this week! Stay tuned for more updates and Microsoft announcements as we report back tomorrow on Day Three. In the meantime, follow our Softchoice team on social media via #SCInspire18, and connect with me on Twitter @lukeblack for more frequent updates from Las Vegas.
This week, the Softchoice team is on the ground in Las Vegas, attending Microsoft Inspire 2018 – Microsoft’s biggest partner conference – and I’m excited to bring you the latest news and announcements.
The conference opened with an inspiring keynote presentation about digital transformation and the way people now experience life through technology. As Microsoft channel leaders took the stage to talk about opportunities for Microsoft and its partners, I was particularly excited to hear about the following news:
As a Microsoft Cloud Solution Provider (CSP), Gold Certified Partner and Licensing Solutions Provider (LSP), Softchoice helps hundreds of customers leverage Azure and Office 365 to increase their IT agility and enable their end users. The Inspire conference is a unique opportunity for us to explore new partnership opportunities with Microsoft and learn about their upcoming technology innovations and roadmaps to lead to new initiatives such as our Microsoft Azure CSP offering with Managed Services.
I will report back tomorrow on Day 2 with more news as we look forward to further announcements from the company, specifically around licensing roadmaps. In the meantime, follow our Softchoice team on social media via #SCInspire18, and connect with me on Twitter @lukeblack for more frequent updates from Las Vegas.