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Microsoft Aims To Ease Purchasing With New 'Enterprise Advantage' Licensing Option

• By Kurt Mackie
• 07/01/2016

Editor's note (12/10/16: Readers should be aware that Microsoft confirmed in December that it is not proceeding with implementing the Enterprise Advantage program.

Microsoft today unveiled a new option that will expand upon its current Microsoft Products and Services Agreement (MPSA) program.

The new "Enterprise Advantage" option for the MPSA, announced today in a blog post, is designed for organizations with 250 to 2,399 users or devices. It's a three-year-term agreement option that will be available sometime in early 2017.

For organizations with the requisite number of users or devices, the Enterprise Advantage option on MPSA could be a better value than the Enterprise Agreement (EA) approach. The main reason that may be true is that Enterprise Advantage enables "organization-wide purchasing" of software and services in one agreement.

Current Agreements
Microsoft's software licensing process consists of contract agreements and software purchasing elements, called "enrollments," which apply to subscriptions and perpetual licenses. EAs and Select Plus are based on the Microsoft Business Services Agreement, explained Mark Nowlan, director of licensing marketing at Microsoft, in a phone call. Services are bought through the Subscription Desktop enrollment, Online Services or Cloud Only enrollment, and the Server and Cloud enrollment. The purchasing right now is all separately handled and complex, he added.

Microsoft has been evolving its licensing agreement programs over time, with the idea of getting to "one uniform approach" where customers can use one agreement to buy all of the products and services they want, Nowlan explained. It's aiming at more "modern licensing" with the MPSA, as well as with its next Enterprise Advantage option step, he added.

The EA is Microsoft's traditional flagship agreement, but the MPSA arose about three years ago to offer greater flexibility, given Microsoft's rollout of its various service offerings. An EA is a fixed three-year agreement that has the advantage of locking down software costs. An EA provides price protection, discounts, and true-up and true-down rights. The MPSA has more flexible terms, with the ability for organizations to buy what they need.

Both the EA and the current MPSA, though, don't presently let organizations aggregate their licensing enrollments to get lower pricing. Consequently, if an organization has multiple business segments with their own Microsoft licensing enrollments, it's not possible right now to combine all of those licensing enrollments to optimize the organization's pricing.

Enterprise Advantage
The Enterprise Advantage MPSA offering, when available, will change that scenario. It assures that organizations will have "the best volume price on every order," according Nowlan. In essence, Enterprise Advantage will be "bringing the EA to the MPSA and making it better," he added.

Under Enterprise Advantage, branches of an organization can buy Microsoft software as needed and then the overall purchasing power will be recognized organization wide. It's possible to mix perpetual licenses and subscription licenses under this plan in the same agreement, "without any enrollments." Previously, organizations would have to have separate enrollments for the two licensing types, Nowlan explained, and they'd have to have separate paperwork.

"Without additional enrollments, it means that they [organizations] can combine those different types of products in one solution and cover their whole organization with that," Nowlan said.

This buying process under Enterprise Advantage is "95 percent automated" for organizations, Nowlan said, contrasting with the more disparate approach under current Microsoft agreement plans.

It's possible that organizations with more than 2,399 users or devices could use the Enterprise Advantage option "if their agreement is straightforward enough to be well met by the functionality in Enterprise Advantage on MPSA," Nowlan said. He explained that larger organizations tend to have more complex arrangements with Microsoft. The program won't necessarily be expanded until Microsoft is assured of an initial good customer experience at its present limits.

When Enterprise Advantage option rolls out in 2017, Microsoft won't try to force its customers to transition to it, Nowlan said. Microsoft right now is just giving advance notice that it will be coming. It's something to consider for renewals or new agreements. Microsoft doesn't recommend switching to the Enterprise Advantage option mid-term, Nowlan said.

In other licensing happenings, Microsoft is retiring its Select Plus program, beginning today on July 1. Also, the minimum number of users or devices to qualify for an EA goes up today from 250 to 500, as previously announced.