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Microsoft's Hidden Price Spike

Recession -- what do you do? If you are Microsoft, you raise prices for your most loyal customers by some 43 percent.  

Loyal customers buy volume licenses, one of which is the Enterprise Agreement (EA). These agreements are purposely confusing because if Microsoft is the only one to understand them, it gives Microsoft control. This is the same technique that lets lawyers charge $300 an hour.

Fortunately some folks, like analyst Paul DeGroot, understand licensing, and by DeGroot's calculations, EA Windows three-year-renewals could cost up to 43 percent more.

That's because when customers renew, they renew not at the EA rate but at the Select or Select Plus rate (which is higher).

What is your experience with Microsoft licensing and is it better or worse than other vendors?

Posted by Doug Barney on 09/17/2012 at 1:19 PM

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Reader Comments:

Fri, Oct 12, 2012 Software Licensing Advisors Corporate

Steven from Michigan. Thank you for your comments. Software Licensing Advisors isn't trying to scare anyone. We're just offering formulas for EA volume licensing customers to extract License and SA prices for themselves to see what the underlying "L" is in your CPS. (or in the case of Windows, we undertand the technicality -- as is in our PDF-- that it is a "U" for upgrade and that your base license is your OEM "stickered" license) The reality is that your SA prices at renewal can be determined to have a much higher underlying L price than during your first EA go-around when you were paying L+SA. We encourage every customer to plug in their own CPS figures into our formulas; they will usually wind up scaring themselves on their own without our help.

Mon, Sep 17, 2012 Al Pennsylvania

More Microsoft-hating from Doug. C'mon, Doug, do a little work on your own instead of just promoting someone else's agenda and badmouthing Microsoft.

Mon, Sep 17, 2012 Dave California

There are benefits to the Enterprise Agreement, however the cumulative cost of SA should never exced the cost of the license until after the 5th year (20%). This is especially true since part of the EA assumes support for the software will be handled by the client which offloads a large support cost from Microsoft.

Mon, Sep 17, 2012 Bewc

I agree with another comment. I'd take Microsoft licensing over Oracle or Adobe or CA.

Mon, Sep 17, 2012 Steven Michigan

The article you referenced is really just an ad for Software Licensing Advisors intended to scare people. Thier PDF and supposed calculation uses the Windows OS pricing. The Windows OS EA license is NOT a purchase + SA like they say. It is an upgrade + SA.

Mon, Sep 17, 2012

I'll take MS licensing over Oracle licensing any day of the week!!

Mon, Sep 17, 2012 Jonathn M Boyko Israel

I'm using only the OEM licensing. I work for an SMB, and have about 100 users. Volume Licensing is pretty much useless to anyone outside the US, who is not an enterprise or an educational facility. For the cost of 3yr VL agreement, I could renew most of my PCs, including OEM licenses of Windows and Office. Quite sad indeed.

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