Gartner Research

How Microsoft's Increasing Minimum Quantities for Enterprise Agreements Impacts Licensing Options

Published: 11 February 2016

ID: G00299955

Analyst(s): Stephen White

Summary

As Microsoft drives its cloud subscription model, changes to licensing programs continue. Increasing the minimum eligible quantity for Enterprise Agreements to 500 licenses as of 1 July creates an imperative deadline for SMBs. Technology procurement leaders must prioritize an option assessment.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Many SMBs currently utilize a Microsoft EA, so increasing the eligible minimum will reduce options for clients with fewer than 500 devices/users currently without an EA by 1 July 2016, and prevent more than one extension for existing EA clients below the new minimum user and device threshold
    • Why This Is Happening Now
    • Grandfathering Grants Existing EA Clients a Reprieve and an Option to Extend for One Term
  • Absence of a direct agreement structure for those unable to enter into an EA after the entry thresholds increase, and the associated difficulty in the negotiation of terms with the alternative programs on offer, will limit the ability for technology procurement leaders to negotiate any customized pricing, terms and conditions with Microsoft
    • Avoid Sleepwalking Into the Cloud
    • Prioritize Accelerated Assessment of Alternative Microsoft Licensing Programs
    • Invest Time in Considering Alternatives, Including Office 365
  • As clients increasingly will be driven to Microsoft's newer licensing models, the Microsoft Products and Services Agreement and CSP programs include benefits but neither provides a price commitment combined with capacity to true down in accordance with demand, which can be accessed through the EA model
    • Evaluating MPSA as an Ongoing Alternative
    • Combined Benefit of Price Protection and True-Down That Are Features of an EA Are Absent in the MPSA
    • MPSA Removes Qualified Device and Qualified User Restrictions but May Introduce New Complexity
    • Cloud Solution Provider Considerations for Online Services
    • CSP May Introduce New Sourcing Activities and Partnerships

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