Sorting out the complexity of Microsoft Volume Licensing

Vijay started a thread on his iQubed blog to which I replied at length, so he split out my comments as a post in their own right. The debate was around whether MS volume licensing programmes are too complex, and take up too much of a business’ time and energy, as well as making it harder for their suppliers and consulting partners to be sure they are giving the best advice. The question posed was “Who Understands Microsoft Licensing?

Fundamentally, one size simply does not fit all. The particular firewall configuration you create for one client will not be suitable for another with different needs.

Does the manufacturer’s configuration manual tell you which options to choose? Probably not, it tells you how to change the setting, which options do what, but it is down to your experience to match the need to a solution and then implement it.

Generally speaking the licensing programmes themselves are reasonably easy to choose between, if the right questions can be asked and answered. The extra benefits which come with some of the programmes are often not the main reason to choose them, but perhaps these are too often allowed to cloud the issue. I’ve tried to discuss the questions below without getting bogged down in the details of exactly which programme offers what, partly since that will change over time and partly because introducing Microsoft’s own terminology is the fastest way to lose people in this minefield.

Do I need to understand all the options in order to get some of the advantages of a volume license deal?

For many smaller businesses, they simply do not have the option of the larger volume deals anyway, so the main choices are:

1) Do I want to own perpetual licenses for my software so I can keep it (at this version) forever after I have paid for it or would I rather rent it on a subscription model, paying out every year until I decide not to use it any more? There are different ways to account for the capital or revenue expenditure of these two methods which may also affect the decision.

2) Am I happy to just buy a single version, and to pay a second time if I want to upgrade later, or would I rather pay a little more and “insure” myself against better versions coming out which I would like to use by choosing Software Assurance?

Timing may be everything on this one – a new version of Windows (Vista), Office 2007, and Exchange 2007 have all just been released. It is quite likely there won’t be another release of these in the next three years. However, for Windows server a new version is expected next year (2008, previously known as Longhorn). Companies using Small Business Server may have to wait slightly longer to get a new version of the fully integrated product (codenamed “Cougar”) and this is likely to require new hardware in many cases since it will only run on a 64-bit platform.

Of course, the right decision for this week will be very different a year from now, or two years. Do you take the gamble, pay less and then stay with the same version for longer until you finally bite the bullet and upgrade to Office 2015 (or whenever the next-but-one release gets here)? If not, you can pay more at the outset and then renew this Software Assurance to ensure that you are always entitled to use the most new-fangled version out there. Firms which like to stay current and have good processes for rolling out new software and training staff can gain more from this than the more risk-averse who still keep a typewriter in the corner “just in case”. You may also need to dispel the myth that older software is less secure, so you must always use the brand new version

What about bigger companies?

There are even better deals available for bigger firms (with hundreds or thousands of employees, rather than tens). Typically these require more planning and commitment, but larger businesses tend to be run along those lines in any case, a three-year IT strategy being quite common.

Similar choices are presented on these higher volume plans as those above, but they also need to consider if they will see more benefit from the reduced administration of one programme versus another, and the fringe benefits of things like the Employee Purchase Programme and Home User Programme.

Of course, there is a “third way” which is to not buy software at all, install nothing but rather pay for “software as a service” where someone else has the hassle of keeping the servers running, patched, backed up and so on. You get the luxury of just renting out this service on a per-user basis (or per-gigabyte for some cost models).

It sounds simple! Why do people think this is so complex?

Some of the difficulty comes about because the terms used in Microsoft Volume Licenses are of their own making and with very specific meanings. Open Value Subscription Select Enterprise Software Assurance – marketing speak at its best. This is simply compounded when people abbreviate everything to convenient but opaque acronyms.

Then there is the confusion over the simple concepts involved in the nitty-gritty of everyday purchasing decisions. “Why do I need a client access license when I already paid for the server?” The legal rights in the license may have no bearing on the actual technical capability of the product. You can install it and run it, but will it be legal?

Lastly, there are those specific scenarios as to exactly which license to acquire (by whichever route) which a particular business comes across; these may not have a straightforward answer because no-one predicted that particular usage. “Can I get a license to upgrade my product Foo to version X and at the same time allow an unlimited number of people to use that software as part of my web-based offering?”. These can only be addressed on a case-by-case basis, but do not usually impact the choice of a volume license programme. You may suffer if you have previously chosen a particular product or version which can’t be used in that way and your previous investment appears wasted. 20:20 hindsight is a wonderful thing in these situations.

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