Gartner Research

Understanding the Impact of Microsoft's "Cloud-First" Strategy on Licensing

Published: 17 March 2017

ID: G00315027

Analyst(s): Stephen White

Summary

Microsoft's transition to a "cloud-first, mobile-first" strategy under CEO Satya Nadella spawned new trends in cloud licensing. Sourcing and vendor management leaders must review the impacts and adapt strategies to deliver flexibility, while maintaining the lowest sustained cost of licensing.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Licensing Microsoft cloud-subscription-only offerings leads Microsoft contract negotiators to increasingly replace perpetual license rights and optional maintenance with perpetual expenses
    • Subscription-Only Offerings Increase Lock-In
    • Online Services Only Enterprise Enrollment Waives Enterprisewide Purchases
    • Microsoft Has Rewritten Its Rule Book With Azure
    • Cloud-Only Innovation Limits the Business Benefits of On-Premises Solutions
    • Cloud and Subscription Policies May Drive Microsoft Clients to Alternative Cloud Solutions
    • Increasingly Competitive Landscapes Impact Partner and Client Relationships
  • Microsoft incentivizes cloud adoption by offering initial discounts, which contract negotiators must reconcile with the risks of declining negotiation leverage and rising long-term costs
    • Enterprise Online Services Introduce New License Rights — With Limitations
    • One Customer's Carrot May Be Another's Stick
    • Secure Productive Enterprise Addresses Issues, but Not All
    • Winning Hearts and Minds to Attract New Clients and Next-Generation Users
    • Infrastructure and Platforms as a Service Race to the Bottom

Gartner Recommended Reading

©2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Purchase this Document

To purchase this document, you will need to register or sign in above

Become a client

Learn how to access this content as a Gartner client.