Updated on May 25, 2022
Your organization, like many others, may be deciding on a roadmap to move applications to Microsoft cloud services, O365, M365, and Azure. As part of this process, you need to determine a pathway from an existing Open or Enterprise Agreement (EA) for licenses or to purchase through a Cloud Solutions Provider (CSP). Here are the many benefits of utilizing a CSP over an EA or Open agreement for Microsoft licensing.
More granular control over licensing flexibility and minimums
A Microsoft EA has a minimum requirement of 500 users that must be met and maintained for the life of the contract. The agreement allows for licenses to be increased during the life of the agreement, but reductions can only be made on the anniversary date.
A benefit of utilizing a CSP is that users and licenses can be changed at any time, and costs will adjust accordingly. CSP allows your organization to meet your changing business conditions; whether you need to be leaner on licensing in or are in a period of growth, you can change licensing to accommodate the business needs and control spending easily. A partner like Ascend Technologies can make the licensing changes you require, often in a matter of minutes.
For example, your organization signed an EA for 515 users in January 2021, and during the year reduced the user environment to 450 users. At the January 2022 anniversary date, user licenses can be reduced to 500 users, the program minimum, resulting in paying for 50 unused licenses. A CSP can provide licensing for as low as one user.
Open Licensing is no longer going to be offered for new or renewals and has been retired as of December 31ST 2021. CSP is a flexible and more cost-effective mechanism for the licensing that you desire for your business, getting you the licensing you need when you need it, keeping you current and supported.
Billing Flexibility is Provided through Ascend as your CSP
Like the user licensing minimums, there is also a contract minimum amount associated with an EA. Once you are billing, the Microsoft licensing becomes difficult to decrease your spending year over year. In addition, the EA could have requirements to maintain software assurance (SA) and support plan levels that will increase the cost of the contract. An EA is usually a three-year contract. If there is a substantial change in organization size or spending habits, there could be some financial concerns associated with the EA. CSP agreements provide more flexibility in billing, allowing adjustments, depending on the licensing, on a monthly or yearly basis with little or no penalty.
Ascend can support you through a CSP
An EA requires the organization to provide first-level support and purchase support from Microsoft for escalation. In this scenario, Microsoft is providing a level of contact for any issues that cannot be resolved by the organization. A CSP will provide a support contract along with licensing. The support provided by a CSP, in many cases, is more proactive with added resource monitoring and security management. A CSP also has the option of a built-in escalation agreement with Microsoft for additional support.
Enterprise Agreement (EA) Changes that restrict further investment with Azure
Microsoft has made some significant changes to the use of Azure consumption within an EA. Since late 2019, an enterprise customer that has not previously purchased Azure consumption through their EA can no longer use their EA for these services. The options for these enterprise customers are to utilize a CSP for Azure consumption or to sign a separate Microsoft Cloud Services Agreement directly with Microsoft. The benefits of utilizing a CSP rather than a second Microsoft contract can be weighed by some of the additional points to follow.
Hybrid Benefit Changes that offer savings but over time will decrease the discounts
Microsoft does offer an Azure Hybrid Benefit when utilizing EA licenses for Windows Server Operating Systems on Azure virtual machines. So, you can use your EA licensing in concert with the CSP licensing for Azure consumption. This has been gradually decreasing over time, but it still offers substantial savings. The trend is that this benefit will continue to decrease for currently supported operating systems and will only remain when extending the supportable life of operating systems that have reached End of Support (Windows Server 2008, for example). For virtual machines that run workloads at a consistent level, there is a far greater benefit to purchasing through a CSP and utilizing Reserved Instances. Reserved Instances provide savings over pay-as-you-go and can be paid for monthly with a minimum annual commitment.
There are some cases where an (EA) Enterprise Agreement may make the most sense for your organization:
- In an organization with thousands of users where tiered pricing may be less expensive than CSP pricing. CSP may not be able to provide licensing for the same price, depending on the level of discount, but it will come in a similar price range.
- An organization that has users under multiple affiliate companies. This can be considered when using a CSP, but it may require multiple contractual agreements for each affiliate, depending on how the organization needs to account for each affiliate’s consumption.
Whether you decide to enroll in an EA or CSP, Ascend can help. Our licensing management structure provides an overview of your licenses, helps you identify risks and opportunities, and offers flexible pricing. We will assist in evaluating which Microsoft licensing type is best suited for your business goals. Contact us today for help managing your licenses throughout product lifecycles!
To learn more about CSPs and Microsoft Licensing, check out this blog from our partner at Interlink.
Written by Bob Armstrong, Peters & Associates