♦ Tip #5: Know your Best Alternative To a Negotiated Agreement (BATNA) before entering Enterprise Agreement Negotiations ♦ (Ongoing Series)
The most common way an Enterprise Agreement (EA) is sold is as a “full Platform EA”, which means that ALL desktops (devices in the current contract language) must be counted up and a single, common desktop image is licensed in order to reap the discounts and predictable payments of an EA. It also means, in addition to the Licenses, you must buy Software Assurance on everything in the EA. In a “Full-Plat EA” each PC will have:
- Windows Enterprise Upgrade (from your OEM Pro License that was ordered with the PC)
- Office Professional Plus
- The Core Client Access License (CoreCAL) Suite
A Note about the CoreCAL Suite
The CoreCAL Suite, doesn’t consist of any physical software. CALs provide the rights for a user or device to access a Server, just like a movie ticket doesn’t come with anything — it’s just getting you in the door. You get the right to watch and experience the movie.
Tony Mackelworth from SoftwareONE does a great job talking about the CoreCAL and many other licensing topics in his blog. (Keep in mind, they are a LAR, but in our estimations, they are one of the few LARs that aren’t connected at the hip with Microsoft account teams and they provide a level of arms-length advice to customers) Check him out at: http://tonymackelworth.wordpress.com/tag/what-is-core-cal-suite/ You’ll also note that Tony is in the UK. In Europe, there seems to be more mature Software Asset Management processes combined with greater LAR independence than in the U.S.
Office Professional Plus – often WAY more than you need
Office Professional Plus consists of a ton of applications that will never be used by the vast majority of your users. It comes with:
Often times, Office Standard (Word, Excel, Powerpoint, and Outlook) will work just fine for the vast majority of your users. And, while it IS an exception to the Enterprise Agreement Enterprise products, it can be requested and commonly approved, either for the entire company, or for a subset. If some folks need Lync or OneNote, buy one-off licenses for them, not Office Pro Plus for everyone.
Often times, shift workers, plant workers, field forces, and advanced knowledge workers can count as a separate group in your enterprise and you can request an exception on your Enterprise Agreement for a different set of software for these groups, called a Line-Of-Business (LOB) Exception. They might only need Office Standard, and may not need the whole CoreCAL (yes, we’ve even seen the CoreCAL suite broken apart in an EA, contrary to the EA Program rules.) In that case, the Customer Price Sheet (CPS) looks something like this:
Here, you can see that not only has an exception been made for Office Standard instead of Office Professional Plus, but also the CoreCAL suite has been broken into some piece parts in an Enterprise Agreement for a specific set of workers. No reseller or Microsoft Account Team would offer that option up. You have to ask for it. Granted, these kinds of exceptions require Business Desk exception approval at Microsoft. The Account Manager and Licensing Specialists need to plead their case to get these kinds of approvals, but don’t let them tell you this can’t happen. In fact, this is a relatively recent Customer Price Sheet for a 1000-seat client. (not a rare one-off exception for some huge customer with clout, or something that happened five years ago). So, certainly, you can get this kind of exception too, if you ask and negotiate.
As some of you may also be aware, it’s common to do component Enterprise Agreements. In a component EA, only one or two of the professional desktop pieces are licensed enterprise-wide. This Customer Price Sheet shows a Windows-only component Enterprise Agreement:
We’re going to go off on a little tangent for a second…You’ll also note an important best practice on this CPS, especially for global companies: If you have approximate PC counts by country, assign the Country of Usage to these counts! In some countries, just saying your PC’s in Vietnam, Thailand or Indonesia are licensed on your US-based EA (with Country Of Usage = USA) isn’t going to cut it. (Certain governments are very strict about this because there may be substantial tax implications in that country that you’re effectively dodging, and the Microsoft rep in those countries know this, so you might get an email from that Microsoft in-country subsidiary challenging your licensing in that country. In the best case, your US-based Microsoft Account team will escalate up to their management, and have them communicate to the in-country manager to shut down their overtures to you. (That may call off the hounds, but it doesn’t satisfy many governments requirements). In the worst case, some countries will get fed up with your failure to respond or document these licenses, and therefore failure to pay appropriate taxes — guys with guns will bop in to confiscate your computers as payment of the tax. (rare, but it’s happened) See: http://www.astheworldsleeps.org/node/6249
Some Microsoft country subsidiaries will go to great lengths to enforce in-country compliance. Why? Because when you specify licenses on your US-based EA price sheet for their country, they get credit for 80% of that revenue transfered to them; meanwhile, your US-Based account team is trying to shut that conversation down entirely, because that means they’ll 1) lose some control, but more importantly 2), they will lose 80% of that revenue from their pockets; they’ll get credit for only 20% of those licenses called out by Country of Usage outside of their Microsoft Subsidiary (USA). Ouch. So, if an in-country MS rep really wants to put the screws to you, they might threaten to report you here: BSA Compliance. It’s anonymous. The point is:
1) Component EA’s are common – license what you need…
2) Best Practice; know what you have in each country and document the country of usage PC counts on your price sheet.
Windows Pro Upgrade with Software Assurance
Windows 7 Pro purchased through your OEM vendor on your new PC purchases provides plenty of capabilities…usually enough for most empployees in your company. Here is a comparison of the editions: http://windows.microsoft.com/en-US/windows7/products/compare
Global firms will likely need at least some Enterprise edition of Windows. Note that you get DirectAccess, BranchCache and the ability to access 35 different language packs, only with the Enterprise edition. There are also some additional benefits when adding Software Assurance to the Enterprise Edition. But, here’s some major consideration points:
1) If you have Windows covered unders Software Assurance on your EA now, you just got rights to Windows 8 Enterprise (OCT-2012)! (Yay! …celebrate by playing Start Me Up – Jay Leno demonstrates the START button for BillG; wait…this is Windows 8? Where’s that START button, again?) Well, the point is, if you renew Windows SA on the EA, you’re now investing in Windows 9. You have pertpetual use rights for Windows 8. So, if you are renewing Windows, can anybody tell me what’s in Windows 9 and when that’s coming out?
2) Gartner predicts that 80% of business users won’t use Windows 8, and TechRepublic recently released a survey suggesting a similar number (74%) would not be using it, so why not consider selectively moving mobile users (not the all-or-nothing coverage of an EA) of your Windows SA-covered licenses on over to SelectPlus for those who need the SA-required benefits. (You can port SA over from your EA to SelectPlus and cover whatever subset of PC’s you want without having to cover everyone.)
3) Not everyone needs the Multi-Language User Interface (MUI)’s 35 languages, BranchCache and DirectAccess. Maybe you have another VPN technology, and you only need English, so perhaps DirectAccess and the Amharic language pack isn’t a big deal to you. (See Microsoft’s 35 Supported Languages just for fun) There are some other SA considerations, but it might be worth considering just buying Windows 7 Pro with your PC purchases via the OEM, and leaving it off the EA altogether.
We find that just about every EA customer, by nature of the EA’s inclusiveness, is over-licensed by quite a bit.
SoftWatch is a strategic partner of ours. They have a cloud-based service that can monitor your users ongoing application-usage patterns and determine which apps a user opens, how long this app is the active window (eyeballs on it), and whether the user is interacting (key & mouse clicks) with that app. What does their data tell us? In a SoftWatch usage scan of over 100,000 desktops across 11 companies of various sizes, the results were telling. Confirming our experience, components in Office PRO PLUS aren’t required for everyone. In fact, these additional apps aren’t required for 80% of them! Here’s just a sample of the output:
- Microsoft Access was 98% unused.
- Microsoft OneNote was 98% unused. (This is higher than expected from this particular population; we figure it’s only 70-80% non-utilized)
- Project was installed but not used on 65% of users machines and 60% of Project users and only viewed documents in Project (they didn’t author/create them) and only needed a (**free**) viewer.
93% of users fully used Outlook (the big missing app from the Windows Surface RT tablet. Why?). I know, I know…it’s outlook.com now. Sorry Charlie, it’s just not the same experience in my book.
So what do I need?
If you run SoftWatch on your PC’s (30-90 days on our trial offer), we’ll tell you exactly what you need, and whether you need Office Pro or Office Standard, (or of those other 20% of your users need Outlook + Word, and that’s it!), or perhaps a cloud service would work for 35% of your users, etc. You’ll even get your hardware profiles, server profiles, with memory, devices, processors, and oh by the way, EVERY installed .exe’s usage on EVERY PC. (i.e.: see who is actually running and using Adobe, SAP–every other vendor too! …No extra cost.)
SoftWatch will report all of your PC’s software inventory by user, which apps they use, how often they use them, and how engaging they are with those apps. Then it all gets summarized into a pretty business intelligence display that can be drilled down to the individual user or machine. The dashboard looks like this:
Techies might want to know that there’s a tiny little agent that’s deployed that watches application use and interaction and sends securely to a server spun-up specifically for you on Amazon Web Services so that you can monitor your usage, software installs, registry changes, and application utilization by app, by user, by PC or even download the data into excel for more slicing and dicing. (It doesn’t capture keystroke or anything instrusive; it’s just tracking inventory, usage and interaction levels by app) Expensive? Nope.
That would be some great data to build a licensing mix around, right? If you solidify a Best Alternative To a Negotiated (enterprise) Agreement (BATNA in Ury and Fisher’s work on Negotiations, a/k/a your “WALK–AWAY-from-the-E–A” alternative) generated by SoftWatch, then you have the makings of a data driven, custom picture of your company’s software needs. After our consulants analyze the data to optimize EA, SelectPlus (or even Open program sometimes), you get your fallback or BATNA position. If Microsoft wants to secure your EA, it should be priced around your BATNA/alternative licensing mix position that fullfills all your needs. Using your actual software usage data is hard to argue with when you present your counter position to your Microsoft Account Team . You’ll know how you can license just the pieces you need, and can rest assured that this will suffice if an EA can’t be negotiated down to an acceptable level.
By the way, you just self-audited… No need for a SAM Engagement here…, Thanks.
Often times, when you make a determination that you will exit the Enterprise Agreement in whole or in part, you leave little choice for the account team, who has just lost lots of your EA revenue, to audit you to recoup some of that revenue deficit.
That’s the standard Microsoft sales playbook…
But, using SoftWatch, there’s NO need for a Microsoft Software Asset Management (SAM) Engagement (it’s an audit: learn more about the disingenuous SAM process here). With SoftWatch, you just captured all your application installs and usage information in 90-days and can optimize it from here. Type in your desktop entitlements (yes, that’s the manual part) and the system splits out any compliance issues for you
(and you alone; not Microsoft, not Resellers, and not Partners) to rectify.
Rather than giving Microsoft or its resellers the keys to your castle (or datacenter in this case) so they can establish and document a deficit and whack you with a bill (see MS Audit Letter Dissection), you can easily reconcile your software assets AND cut out what you’re not using — combine that with your future-looking technology roadmap and you’re golden. That’s part of the framework of our data driven approach that we use to establish your true needs and build a licensing solution that eliminates waste, optimizes the rest, and negotiates a better position. This usually results in at least 30% savings, and often to over 45%.
Building this approach into your EA renewal plans 6 months ahead of expiration is a good move. Calling us here at Software Licensing Advisors to expertly build your BATNA and negotiate your next Volume Licensing Program is a great move.
CALL SOFTWARE LICENSING ADVISORS TODAY
Do you think we shared ALL of our sage wisdom with you? (Gotta keep some in our bag of tricks.) So, give Software Licensing Advisors a call at 1-866-825-3787 to help you negotiate your BATNA. We have an all-star team of ex-Microsoft, ex-Reseller, and ex-Microsoft Analysts from top research firms that collectively knows more than even the most tenured Microsoft Account Teams.