Microsoft ups user, device minimums for Enterprise Agreement volume licensing deals

Microsoft's ultimate quest toward 'one volume license agreement' is taking a step forward with a coming change to its Enterprise Agreement minimums, which takes effect July 1, 2016.
Written by Mary Jo Foley, Senior Contributing Editor

In another step toward trying to simplify its licensing, Microsoft is changing some of the rules regarding its Enterprise Agreements starting July 1, 2016.


As of that date, business users who want to go the Enterprise Agreement approach will face a minimum requirement of 500 users or devices, rather than the current 250. Microsoft will steer those with fewer than 500 devices/users to its Microsoft Product and Services Agreement (MPSA) and Cloud Solutions Provider (CSP) programs, instead.

Microsoft introduced its MPSA software/services license in 2014 and CSP shortly thereafter. Microsoft is in the midst of phasing out is Select Plus volume license agreement.

Microsoft has been privately notifying its reseller channel about the pending change since January, said Mark Nowlan, director of licensing marketing, Worldwide Licensing and Pricing. Microsoft went public with the planned changes on February 1.

Microsoft's ultimate goal is "one, unified approach to volume licensing," Nowlan said. Microsoft wants customers to be able to manage their various licensing agreements with the company so that it feels like they only have one, he said.

"We want it so anyone (any commercial customer) can buy anything from us they want to, and have one place to see all their purchases," Nowlan said.

In the nearer term, Microsoft's ultimate goal is to get all customers to use MPSA and CSP for their licensing. Microsoft officials said there isn't a hard and fast cutoff date, at this point ,as to when the company intends for this to happen.

Microsoft officials said in the last couple of years, the composition of its business-customer licensing deals has shifted. In fiscal 2015, more than half were for online services only, with no enterprise-wide coverage requirement, said Alex Dubec, Enterprise Agreement program manager, Worldwide Licensing and Pricing. MPSA and CSP are more suited toward addressing these kinds of scenarios, he said.

A few caveats about the new Enteprise Agreement minimum requriement. This is for new commercial-enrollment customers only; existing Enterprise Agreement customers will have up to six years to comply. The new cutoff does not apply to public-sector customers. It also doesn't apply to the Server and Cloud Enrollment (SCE) program. And in countries where the MPSA has yet to be rolled out, the new minimum requirement for Enterprise Agreements will remain at 250 users/devices.

"Microsoft is looking at this like it will reduce complexities. It also becomes a conversation about getting customers to the cloud," said Microsoft partner Blake Gollnick, director of the Microsoft practice for SHI International.

There are pros and cons for resellers in Microsoft's move towards MSPA and CSP, Gollnick said. There are some additional risks around the indirect billing structure and new incentives, he said.

"But when the MPSA is fully implemented, it will provide a more seamless process for partners to talk to customers about their solutions instead of having a program conversation," Gollnick said.

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