News

Microsoft Announces 'Enterprise Advantage' for MPSA Licensing

• By Kurt Mackie
• July 05, 2016

Microsoft is preparing a new licensing option called "Enterprise Advantage" for its Microsoft Products and Services Agreement (MPSA) program.

Designed for organizations with 250 to 2,399 users or devices, the Enterprise Advantage option will launch sometime in early 2017 as a three-year agreement option, Microsoft said in its announcement last week.

For organizations with the requisite number of users or devices, the Enterprise Advantage option could be less costly than current MPSA or Enterprise Agreement (EA) approaches. 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 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.

However, neither the EA nor the current MPSA presently lets 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 option, 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 the Enterprise Advantage option, 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.

Enterprise Advantage is being piloted now. That's being done to assure that the program meets customers' needs when it gets launched in 2017, Nowlan explained.

It's possible that organizations with more than 2,399 users or devices could use Enterprise Advantage "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 the 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 Enterprise Advantage mid-term, Nowlan said.

In other licensing happenings, Microsoft retired its Select Plus program as of July 1. Also, the minimum number of users or devices to qualify for an EA has increased from 250 to 500, as previously announced.