Microsoft Licensing, June 2010 — The Perfect Storm

Last week I recorded a podcast on what has recently become a very hot IT research topic at Forrester right now — Microsoft licensing. June 2010 signifies an extremely active and very hectic month for a large number of businesses because it's not only the last month of Microsoft’s fiscal year but also the last month for a large portion of Microsoft's three-year contracts.

The reason for this pileup of Microsoft licensing activity partially stems back to 2000: Microsoft refreshed their volume licensing program and introduced Software Assurance. Microsoft Enterprise Agreements are typically for three years. Facing the initial June deadline in 2001, many businesses switched over to this offering and since then, every three years their licensing agreements need to be reassessed and renegotiated. Now fast forward nine years to June 2010 and factor in several significant new products releases — and  here we are again witnessing what is truly the perfect storm of activity, discussion, and negotiation for businesses and their Microsoft licensing, decision-making personnel.

As you might expect, we receive an ever-increasing number of inquiries related to this subject as we continue to get closer to the aforementioned June 30th deadline. Clients bring a range of questions like whether or not they should renew their enterprise agreement (EA), if Software Assurance holds enough value to justify the commitment, or what IT upgrades and migrations impact their decisions. My first response to these questions is. . . there is no easy answer. Each company has their own set of requirements, cost limitations, and future strategic plans that affect which decision is right for them.

It used to be that you could simply determine the breadth and depth of your agreement by knowing what products you used and when the next versions were rolling out. And while we can still sift through many of the benefits and challenges of upgrading to newer versions of Microsoft programs (see the Solving SharePoint Infrastructure Problems and Exchange 2010 — An Upgrade Worth Considering Forrester reports), this exercise is becoming increasingly complex. Software Assurance holds a much greater operational impact to the business and can influence the capabilities that you want to deploy and the effectiveness you will have in successfully implementing them. Certain versions, entire products, and capabilities are now tied to Software Assurance decisions.

So, what's the right approach to address your Microsoft licensing agreement and how should you begin to evaluate it? — for more information, I encourage you to listen to the full podcast.

As always, I'm very interested to hear any and all feedback from you regarding this topic.

Forrester will also be hosting our next "Successfully Negotiating Your Microsoft Licensing Agreement" Workshop in Cambridge, MA on July 20th, 2010.

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