Every day counts when it comes to Microsoft Licensing. Every day where the firm does not have full control of its licenses can severely impact on its reputation, budgets and possibly cash flow.
Although this may seem obvious, getting to grips with the problems of over- and under-licensing Microsoft software solutions can be a minefield. If either situation exists, the cost consequences can be punitive and the firm’s reputation can be affected. This is why talking to an expert on these issues can save you a lot of wasted time, trouble and headaches.
For more than 20 years, our principal consultant, Paul Hoffbrand, has worked for suppliers and has developed sales propositions to the legal profession. Since creating his consultancy business, over time, Paul has developed strong working relationships with a number of licensing vendors including Software One, Bytes, Dimension Data, MBA IT, Softcat and Trustmarque. These relationships ensure the right level of vendor contact, is used to good effect to attain the best licensing solution or in negotiations over renewals, service level agreements and audits.
The only good thing to be said about being under-licensed is that the situation can be fixed by purchasing of additional licenses. However, there is a real risk that broken licensing agreements could seriously affect the firm’s reputation and unnecessarily increase costs.
Over-licensing can occur easily and has been seen over the last few years as a result of a reduction in staff members.
A number of firms have over-licensed in order to ensure that licensing agreements and rules are not broken. This is entirely understandable however with only a few processes and procedures, the situation can be alleviated. Our strong recommendation is that an annual licensing review is undertaken to highlight issues sooner rather than later and double check before ordering new licenses!
Yes of course it is but no experienced licensing organisation should guarantee a cost reduction around the purchase of software licensing. That said, many firms have enjoyed a cost reduction in the past and, with our advice, may be able to make a reduction in the future.
Hoffbrand Consulting was commissioned by a firm to assist with a review of the Microsoft licensing partners to aid the IT Director to make a valued judgment with regard to his firm’s licensing position and future plans.
The IT Director was aware of the need to complete a review of the licensing position but neither had the expertise nor resource to complete the job internally.
I had known and worked with the IT Director for many years in other firms and while new to his current firm he could not easily understand how his predecessor purchase licenses. Our previous relationship meant that I could become involved very quickly. It became a major concern for me and discovering the truth was of major benefit to everybody involved. We were concerned that the firm was about to be audited by Microsoft, which is a time consuming and potentially costly experience. I subsequently found out that the audit was approximately a week away however with the work being carried out, the audit was put on hold.
A Microsoft audit requires the firm to provide proof of ownership of each licence. If such proof is available, Microsoft investigates whether the licenses are legitimate. We are aware of firms that have purchased licenses through legitimate routes however, the supplier purchased via an authorised root which meant that one firm had to repurchase over 300 licenses of Microsoft Office and another had to spend approximately £600,000 to repurchase Microsoft Office, which then needed to be upgraded to the latest version.
Firm of all sizes can and do make license purchasing decisions without fully understanding what has been proposed by the Microsoft licensing reseller. The reason for this is that Microsoft licensing is known to be something of a minefield and can be very complicated. Our experience with such matters can assist in resolving this problem.
We were tasked by the IT Director to investigate the marketplace. One of the first tasks was to request a report from Microsoft showing the current licenses - this is called the Microsoft Effective License Position and could look something like this:
Each line of the report details the Applications/Servers/Systems licenses purchased together with the version of the software that is current.
The Applications group consists of products such as Microsoft Office, Project, Publisher, Visio, etc.
The Server group consists of products such as Windows Server, SQL Server, Windows Terminal Server and their related client access licenses (CALs).
The Systems group covers endpoint (PCs etc.) operating systems being Microsoft Windows 7, 8, and 10.
From this report, we can gather information with regard to the current entitlement and immediately understand whether the firm is under- or over-licensed.
We met with each supplier and received very different proposals. We reviewed each proposal and created a report so that it would be simple to review the proposals side-by-side. The report allowed the IT Director to make choices which helped cement our long standing relationship as a trusted advisor.
We then met with each supplier again, this time with the IT Director. Microsoft licensing providers can easily fall into the trap of using acronyms which are usually neither translated to, nor understood by, the customer. As we have an in-depth knowledge of Microsoft licensing rules, we were able to successfully liaise with each provider and translate the information provided.
The results of the work done was the purchase of a Microsoft Enterprise agreement (see below for further information on licensing agreements), Microsoft agreed not to pursue the audit and the IT Director remains happy with this purchase and the work we did.
If you would like to find out more about how we can help with Microsoft licensing, call Hoffbrand Consulting +44 (0)20 3002 0883 today and we will be happy to walk you through the process.
.There are four types of agreement available, see details that follow. It should be noted that any subscription agreement provides licenses that are not owned by the firm and as would generally be offset against an operational budget rather than capital expense.
Under normal circumstances, subscription agreements last three years and include Software Assurance which means that the most up-to-date licenses will be available. It has proved in the past that most law firms find a subscription license to provide not the best value for money because a license purchased via capital expense (particularly Microsoft Office) can be written off over a greater length of time when compared with use via a subscription agreement as there is generally no urgency to have the latest version implemented.
The Open Agreement list includes Open Value, Open Value Subscription, Open License and Microsoft Online Services. These agreements generally cover a firm with 5 to 250 users.
Microsoft Online Services give access to Microsoft Office 365 more details of which can be found by following THIS LINK.
Licences to use software purchased via an Open Value agreement can be purchased on an ad hoc basis.
Pricing for Open Agreements are set by the licensing partner having added a level of profit which leads to a disparity of cost quotations. Our service includes the provision of an easy to follow comparison table that enables a decision to be made from a position of knowledge.
This is one of the most popular forms of licensing agreement in law firms and provides various levels of discount according to the quantity of licenses purchased - however, as of 1st July 2015, the Select Plus agreement will be replaced by the ‘Microsoft Products and Services Agreement’.
Select Plus agreements are to be retired for commercial agreements and will eventually be replaced with the Microsoft Products and Services Agreement.
The Select Plus agreement is targeted at firms with a staffing or endpoint count level of 250 or more.
We advise any firm that is considering the purchase of licenses using a Select Plus agreement to carefully review the frequently asked questions about the agreements’ retirement by following THIS LINK before making any decision.
The Microsoft Products and Services Agreement is a single agreement for software and online services purchases across a firm. It can save time and money by combining purchase points for the best price level (commercial agreements) and reducing the administrative overhead associated with managing multiple agreements.
Like the Select Plus agreement, the Microsoft Products and Services Agreement is targeted towards firms with a staff level or endpoint count of 250 or more.
Further details can be seen by following THIS LINK.
An Enterprise Agreement is the least expensive (per unit) model for purchasing Microsoft licenses however, there is a requirement to have at least one product, for example Microsoft Windows or Microsoft Office for every PC belonging to the firm and specifically not for PCs owned by individuals.
There are very many other benefits gained from entering into an Enterprise Agreement that would, if used correctly, more than compensate for the difference in outlay.
Licences to use software purchased via an Enterprise Agreement can be purchased on an ad hoc basis once at least one item (Microsoft Windows, for example) has been purchased for every PC owned by the firm.
The Enterprise Subscription Agreement is the same as the Enterprise Agreement except that the firm does not own the licences. It requires a lower cash outlay at the outset and as noted above, the cost can be set off against the operating budget rather than capital expenditure. At the end of the initial three-year term, there is a buyout option to make the licences perpetual and the firm would be able to deploy the latest version of the software available at that time.
Licences to use software provided by an Enterprise Subscription agreement can be subscribed to on an ad hoc basis once at least one item has been subscribed for every PC owned by the firm.
To find how we can help you, call Hoffbrand Consulting on 020 3002 0883 today and we will be happy to explore how we can work together.
