News

Possible Microsoft EA Renewal Price Hikes Back in Spotlight

• By Kurt Mackie
• October 04, 2012

Consulting firm Software Licensing Advisors is once again reporting that organizations may face "stealth" price increases when they renew their Microsoft Enterprise Agreements (EAs).

The firm's October "formula" analysis suggests organizations can take a hit of 58 percent by renewal time when licensing the "Platform EA" bundle consisting of Windows, Microsoft Office Professional Plus and Client Access Licenses. The analysis comes from Paul DeGroot of Pica Communications, a well-known expert on the subject.

Shifting EA Discount?
As with his earlier formula analyses, DeGroot warns about shifting EA discounts, but this time for the Platform EA bundle. The discount at initial signup, which is 15 percent when buying the Platform EA licensing, apparently changes at the time of renewal. According to DeGroot's scenario, it diminishes to five percent. Apparently, the shift in the discount isn't disclosed on Microsoft's renewal forms. Organizations need to perform backward math calculations, as DeGroot does, to discover the change.

For organizations buying in bulk, this lower discount rate can amount to a fair amount of money. DeGroot estimates that an organization paying to license 5,000 Windows desktops over the three-year Software Assurance period would pay an extra $428,250.

DeGroot outlines the math, which Microsoft has contested in the recent past. However, since the discount isn't spelled out at the time of contract renewal, customers are left to their own wits (or to an advisor's calculations) to figure it out the changes, if any.

Windows 8 and Hyper-V Costs
Software Licensing Advisors has also recently addressed the question about Microsoft's coming licensing changes with Windows 8, which haven't been fully delineated yet by Microsoft. Windows 8 will ship with Hyper-V hypervisor on the client side for the very first time. However, using that hypervisor could entail additional licensing costs, depending on how it is used and the kind of licensing an organization has secured.

Many have assumed that Hyper-V could be used to host an older Windows operating system, which could prove useful in the future for organizations migrating from one Windows operating system to another. However, Microsoft has typically just said that Hyper-V on Windows 8 is there for independent software companies to test software versions or for IT pros to run tests on older Windows versions, rather than to support migration scenarios.

Possibly, Microsoft may only offer Windows 8 for x86/x64 systems as an OEM or system builder release for installation on hardware, rather than as a retail-sold packaged product, according to speculation in a Software Licensing Advisors blog post. If so, the restriction to an OEM-style license would mean that the OS would be tied to the specific hardware. In such cases, using Hyper-V on Windows 8 to run another copy of Windows 8 as a guest operating system may entail added licensing costs. If Windows 7 were the guest OS running on Windows 8, it would have to be the boxed retail version, which can be installed on another machine, rather than the OEM or system builder version.

It's not quite clear yet what desktop virtualization rights users will have with Windows 8, so the blog post remains speculative until Microsoft releases product details. However, the post suggests that having Software Assurance on Windows 8 or a Virtual Desktop Access license or a Windows Intune subscription may be the only means to properly license virtual machines running on Windows 8.

See Also:

• Report: Microsoft Raising EA Licensing Renewal Costs Over 40 Percent