A good time to bargain with Microsoft

It might be a good chance to renegotiate your desktop licences, says Ephraim Schwartz

I think it’s wonderful that Bill Gates is retiring so that he can devote himself to his foundation. If he puts half the effort into doing good works that he put into building Microsoft, the world will benefit. However, that doesn’t mean your company has to continue funding his efforts by overpaying for Microsoft licence agreements.

A Gartner report, issued on June 5, Five Leverage Points to Use When Negotiating with Microsoft, focuses on the Microsoft EA (Enterprise Agreement). EA is a subscription model (aka revenue stream) for Microsoft, in which companies sign on for, usually, a three-year period. During that time they receive certain guarantees, but, as it turns out, they may be paying for more than they need.

Software Assurance is a big part of an EA. It guarantees that you will always have the latest version of Windows and Office. But the length of time between versions is growing longer. For example, the last release of Windows was six years ago. If you have an EA from five years ago and have renewed it twice, you may have paid for that entitlement three times over. Some organisations opt for an EA but still upgrade desktops at the department level, which means they end up paying a second time for the Windows and Office licences.

The second EA entitlement is the Core Client Access Licence. It bundles client access licences with Windows Server, Exchange Server, SharePoint Server and System Management Server for a single, low, low price, so to speak. But what if your company uses Lotus Domino?

A company that uses fewer than all four Microsoft servers is paying for client access it will never use. If you take the à la carte Select Agreement approach, in which your company owns the software and there is no assurance, you can save a great deal of money.

The third big-ticket item in the EA is Microsoft Office Professional Edition. The difference in price between it and the Standard Edition is about 25%, but the difference in features is negligible.

There are many currents in the industry that can offer ways to reduce the cost of client PCs. Smarter companies are recasting their desktop purchasing strategy by segmenting their users. They know one size does not fit all — so why pay for it all?

There is a shift taking place, away from mammoth applications and the support they require. My fellow columnist Oliver Rist says you’ll need 2GB of RAM to run Windows Vista. However, on the horizon are downloadable applications from the likes of Google, not to mention mashups, reusable web services, and the OpenDocument format.

In addition, the fact that the desktop is no longer the centre of the universe means you can now safely consider, where appropriate, Linux desktops. It may not be right for all 50,000 of your desktop users, but maybe there are 25% who would do nicely without all the bells and whistles of a Windows desktop.

Finally, other leverage points you can use, according to Gartner, include convincing Microsoft that you can walk away from the deal and use your currently established licensing rights, or that you can upgrade Windows via the hardware refresh, rather than through an EA agreement.

It’s hard to say when exactly the world changed, but certainly everyone can agree that innovation has moved off the desktop. Perhaps it is time to stop paying it tribute.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags managementMicrosoftlicensing

More about BillGartnerGoogleLinuxMicrosoft

Show Comments