Microsoft’s New Licensing Model: What You Need to Know

Right before I was promoted to IT Manager, my manager and CIO tasked me with sorting out a Microsoft Enterprise Agreement. For years, our company had been purchasing licenses as one-offs, but our goal was to be a world-class IT organization. Part of that was consolidating vendors to a list of key strategic partners and one of those was Microsoft.

I spent months gathering our server inventory, interviewing our business application owners with regards to SQL usage, talking to site support about the feasibility of rolling out new Windows and Office licenses, debating on Exchange vs. Office 365 and generally looking for every scrap of Microsoft licenses we had and could retire. It wasn’t an easy exercise. Luckily, my Microsoft Account Manager was there to help, but it was still painful.

In the end, we decided to go with Exchange on-premises and the EA was signed. We committed to three years and started the work of displacing incumbent, non-Microsoft software.

About nine months into the EA, we switched gears and the initiative came down to moving to Office 365. Since we committed to the EA, this was a costly change. Microsoft stepped up and helped lower the price, but it was still rough and we still owed our initial commitment.

EAs can be great vehicles to buy licensing if your business is over 500 seats, predictive and stable or if you’re looking to Microsoft as a strategic partner and key vendor to your business. If you are covered under an EA, you also are entitled to the latest Microsoft software.

By contrast, some customers see a downside with the three-year commitment, annual adjustments and general lack of flexibility. Also, when you enter an EA, you traditionally work with a licensing partner that takes your order, but does little to help you use any of it.

As Microsoft and customers move to a cloud first, mobile first world, the speed at which businesses operate can make an EA less appealing. Customers are looking for more flexible licensing options and real help in getting the latest technology deployed and supported. Luckily, Arraya is part of a Microsoft program that can help.

Under Microsoft’s Cloud Solution Provider (CSP) program, Arraya can become a strategic partner for your business in two ways. First, we can directly sell Azure, Enterprise Mobility + Security and Office 365 licenses to your business. Second, your purchase comes with our 24/7 support and ability to help you make sure you are getting the most out of your investment.

With the flexibility to add, remove or adjust users and services when you want and be billed for just your usage, more and more customers are starting to consider CSP a viable alternative to a full EA, especially if they are under 500 seats. CSP delivers on the subscription promise of an EA with scale and flexibility.

With CSP through Arraya, you are only paying for what you are using. As your business shrinks and grows, you don’t have to worry about a lengthy commitment or true-ing up users annually. If you shrunk in size, you could be leaving money on the table with an EA, but with CSP, you just adjust. We’ve put together a comparison guide to help customers decide when to purchase Azure and Office 365 through the CSP Program vs. an Enterprise Agreement.

Microsoft recently announced significant changes to their licensing, eliminating Pay-As-You-Go options for MPSA customers, which are agreements for companies with 250-500 seats. Customers will be directed to work with a CSP partner, like Arraya to help them. You can still get Pay-As-You-Go with either an EA or directly from the Azure portal, but the CSP ensures you have the right guidance through a strong partner.

If you are considering options on your Microsoft licensing and would like some expertise to help guide you, our Microsoft and Cloud Practice stands ready to help you with these decisions. Reach out to us today at mssales@arrayasolutions.com!