Microsoft Licensing in Plain English - Connection

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Microsoft Licensing in Plain English Server and Cloud Enrollment (SCE) Author Lane Shelton, VP Software Business Development, PC Connection, Inc.

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WHITE PAPER MICROSOFT LICENSING IN PLAIN ENGLISH

Microsoft Is Retiring EAP and ECI as Stand-Alone Enrollments The Enrollment for Application Platform (EAP) is a licensing vehicle for SQL, SharePoint and BizTalk Server, and Visual Studio with MSDN. Its chief characteristics are a three-year term, an enterprise-wide commitment to Software Assurance on the products you choose to include, and hefty discounts on new licenses purchased during the agreement term. The Enrollment for Core Infrastructure (ECI) combines Windows Server and the System Center management platform into a single agreement, with additional discounts for buying them together. The ECI didn’t have an enterprisewide commitment level, but both EAP and ECI had minimum requirements to participate. Finally, the EAP had a special incentive when the annual spend exceeded a certain level, which included unlimited technical support on SQL. The new Server and Cloud Enrollment (SCE) will replace both EAP and ECI, turning them into something like chapters in a book. The book of SCE will contain three chapters and an epilogue, and you can determine which chapters to include: Core Infrastructure—This is very similar to the old ECI Application Platform—SQL Server (can also include BizTalk and SharePoint Server) Developer Platform—Visual Studio Premium and Ultimate with MSDN Subscriptions Windows Azure—This is the “epilogue” and will be available automatically if you choose one or more of the chapters in your SCE book. Or you can just include the Azure component by itself.

Discounts Are Changing It is widely known that EAP and ECI discounts are substantial. The SCE, by contrast, will offer a 15% discount on new purchases and a 5% discount on Software Assurance renewals. At first glance, it would appear Microsoft has cut the discounts down in the SCE, but that’s not necessarily true. First, EAP didn’t have discounts at all on Software Assurance beyond what you

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could get in a normal Enterprise Agreement. ECI did, but only because the combination of Windows and System Center had the discount built in—new or renewal. If you have a big SA renewal component to your EAP, the new 5% SA discount will add up over time. Also, the EAP discounts on SQL Standard new purchases were only in the 10% range—so if your profile is weighted to SQL Standard, you could be seeing a larger discount on new purchases as well. The only way to know for sure will be when we get official pricing and can model the impact to your particular licensing. We can look at one scenario under the EA/ EAP/ECI model, then run the same scenario in the EA/SCE model and compute the difference. For now, don’t be immediately concerned by the 15% / 5% discount structure. There’s more to it, and once we have more data, we can begin to determine what it means in your context.

The Beginning of “3D Licensing” A key financial consideration when thinking of moving Windows Server based workloads to the cloud is what happens to all the on-premise licenses of Windows Server. For example, say you signed an Enterprise Agreement with 20 Datacenter licenses to cover your VM hosts, and 25 Standard licenses to cover your physical servers. If you moved that infrastructure to Microsoft’s Azure cloud, what could you do with all those Windows licenses? You just signed your agreement so you have to pay for the next three years. Unfortunately, there’s not a lot you can do in this situation. Your best option is to talk to Microsoft to see what they may be able to do for you. Although the details are scant in the initial release, it looks like Microsoft is working on a way to make this transition less painful. Most likely this will take the form of enhanced License Mobility use rights, combined with some kind of new subscription-licensing option that will make retiring, moving, or consolidating workloads with Azure less likely to generate painful shelfware scenarios. We’ve long argued that licensing in the new cloud-enabled

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world needs to become 3D, and by that we mean providing customers with licensing means to transition in and out of different computing states: today it’s on-premise, then a managed co-lo, then a public cloud, then back to managed co-lo—all without requiring as much licensing transition pain. State-ofcompute is the 3rd dimension. A license is for a specific version and edition (e.g. SQL Standard 2012), state would be the flexible component ranging from on-premise to public-cloud. We’re hoping that the details prove that SCE is a first step in this direction, so we’re cautiously optimistic and looking forward to learning more.

The Fine Print Much of the SCE reads like combining the EAP and ECI into one agreement, altering the discount structure somewhat, and including a flexible cloud-component around Windows Azure. There is always fine print, however, and below are the things you should note.

Enterprise-Wide Commitment Now Applies to ECI (Windows/ System Center) Don’t panic if you have an ECI today and don’t cover your entire infrastructure with your ECI. You can keep the ECI SKUs like you have today, in the quantities you want—but renew your SA either as additional products on your EA or through a Select Agreement. Even better, Microsoft said that the new 5% SA discount will apply even if you go EA or Select. This won’t be a forced choice, which means you can look at your options and decide the best path forward. However, to get the 15% discount on new purchases—are you required to purchase enterprise-wide with Software Assurance? We don’t have exact details on what this means (and for something as fundamental as Windows Server we’ll need very clear details), but if it’s like SQL was in the EAP it means your entire production environment will be required to have SA. That could be problematic for many organizations. We have many customers


WHITE PAPER MICROSOFT LICENSING IN PLAIN ENGLISH

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Unlimited Problem Resolution Support Extends to Windows Server and System Center

with huge legacy environments that wouldn’t be a good fit for SA, and so weren’t included in an ECI. Bottom line, the best way to approach it is with numbers and data modeling. Let’s look at your full environment as it is today, and how it will likely change over the next few years, run the numbers, and make an informed decision that provides the best outcome.

Because it’s all one agreement now, Microsoft appears to be extending the Unlimited Support option to cover Windows and System Center as well. Previously this benefit was only offered to EAP customers on SQL, BizTalk, and SharePoint. The EAP minimum to qualify was at least $250,000 per year on those products and an active Premier Services agreement. There will no doubt be stringent minimum qualifications with the SCE as well, but if you do qualify it could be a big plus.

Price Increase for Windows Datacenter and Windows RDS: November 1, 2013 Microsoft has announced a price increase: Windows Server Datacenter with unlimited virtualization rights will be listed at a price of $6,155* per license. The RDS Device CAL will retail at $102* and a RDS User CAL for $118*. We are not sure what the exact numbers will be for Select and Open, but we’ll let you know as soon as we can. This should not affect existing agreements, but it’s something to take into consideration for your next EA or SA renewal. Likewise if you’re budgeting any new non-EA purchases after November 1, 2013, it might be a good idea to think about doing them before that deadline.

EAP/ECI Agreements Today Existing EAP and ECI agreements will not change. You’ll have until your current EAP/ECI expires to determine if you want to make the jump into SCE and the enterprisewide SA commitment that jump will entail.

what it would look like versus migrating to an SCE at the next renewal event. This should be relatively straightforward once we have SCE pricing, but there may be complications if you have EAs, EAPs ,and ECIs on different renewal timelines today. Depending on how the numbers shape up, a third scenario might call for consolidating agreements and enrollments early into the SCE, and that will require more customized analysis. Don’t forget the price increase coming to Windows Server Datacenter, because that will be another factor to consider if you’re thinking about the Core Infrastructure component. As always, the Microsoft practice here at PC Connection, Inc. is ready to assist, and will have modeling templates ready to go as soon as we have all the facts.

Determining If SCE Is a Good Fit We recommend a simple data modeling approach of setting up a baseline scenario around your existing agreements and pricing, then striking a comparison against

These are list prices based on their Open program of around 28% on Windows Datacenter and 20% for RDS CALs.

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More Information •• Volume Licensing

http://www.pcconnection.com/IPA/PM/Solutions/Licensing/Microsoft/default.htm

•• Server and Cloud Platform http://www.pcconnection.com/IPA/PM/Brands/Microsoft/Server2012.htm

•• SQL Server http://www.pcconnection.com/IPA/PM/Brands/Microsoft/PCCB2B/SQLServer2012.htm

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