Speed, cost, and innovation. This is the promise of the cloud for businesses. And as more and more companies are taking the plunge, having the licensing that makes sense for them is critical to realize the full value of the cloud. This is particularly important as the journey to the cloud has turned from an aspirational goal to a business priority.
But knowing that businesses need to move to the cloud is not the same as understanding the means that can help them get there in order to make the most out of the cloud technology.
The next obvious step is deciding what type of license will be the most appropriate in the face of a fluctuating business environment. And that means looking at their business operations and needs. These aspects can be hard to pin down, let alone predict for future reference. But when it comes to the cloud, it is vital to know what works best.
In practice, this implies making sure that you know the scope of the cloud licensing, the duration, and the pricing associated with it. And to this end, we will look at the differences between EA subscription vs CSP and examine what would make the most sense for businesses seeking innovation and business value.
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All About Microsoft’s Enterprise Agreement
What It Is
Microsoft’s Enterprise Agreement is a licensing package issued by Microsoft for large organizations operating with 500 or more personal computers. The minimum quantity of devices used to be 250 until July 2016, but nowadays this applies only to public sector customers. This type of agreement has been very popular throughout the years, especially since it allows companies to add different licenses along the way.
✅ Pros
The Software Assurance program
Software Assurance is provided by Microsoft in association with a wide range of software and services products. It warrants access to upgrades, training, and resources to help businesses make the most of their IT environment. A lot of businesses rely on Software Assurance, so they would tolerate recurring changes to the EA as long as they will have no consequences on the Software Assurance program.
Discounts for Companies Buying in Bulk
Microsoft offers volume discounts to customers that place a high number of orders.
🛑 Cons
High Barriers to Entry
The fact that businesses need to purchase at least 500 licenses to qualify means that they either pay for more licenses than they need or seek other options. As cloud-based services like Azure and Office 365 are gaining ground, more and more companies are looking for more flexible alternatives.
Limited Flexibility
Each company operates differently and they have different business priorities. The EA leaves little room for customization and might push some into overspending to cover for what they need. Some businesses would rather opt out of Software Assurance or do not want to commit to the 3-year license. With EA, they cannot do that.
Unpredictable Costs
In spite of the 3-year contract, the EA is billed in chunks. This allows you to budget accordingly but sometimes the contract pricing can change as a result of Microsoft’s yearly inventories. The inventories are conducted to confirm that you paid for the right amount of usage and can lead to surprise costs over time.
All About Microsoft’s CSP Program
What It Is
The CSP licensing model is slowly but surely gaining ground among businesses worldwide as they seek more control over their licensing implications. It is based on a subscription payment system which means that you pay for what you used on a monthly basis.
✅ Pros
Added Licensing and Pricing Flexibility
Forget yearly pricing schemes that go beyond what you actually use. With a CSP model, you pay a monthly fee, only for what you use and need.
No License Restrictions
No need to opt for a 500+ license if you use fewer devices in your operations. The CSP model warrants greater flexibility for users and devices.
Ongoing Support
If the EA model expects you to manage the licensing on your own, the CSP partner provides additional support and is available around the clock for all your licensing needs.
🛑 Cons
Limited to the Cloud
For businesses that have no intention to move to the cloud, the CSP model will not provide much value. It is limited to Microsoft’s solutions that work online, such as Office365, Sharepoint, or Skype for Business. If you rely extensively on on-premise software, you might need an additional contract with Microsoft to obtain the optimal coverage.
Additional Problems Related to the Cloud Migration
Operating in the cloud does come with its own disadvantages. Businesses should prepare for additional security provisions, additional cloud costs, and changes to their licensing metrics that could complicate the software audit.
EA vs CSP: The Bottom Line
Let’s see how the two licensing models compare
|
EA |
CSP |
|
🛑 3-year commitment 🛑 Annual pricing and additional costs for extra users 🛑 Increase users anytime but you need to have a minimum of 500 🛑 General support from Microsoft but no personalized option ✅ Includes all Microsoft products |
✅ Can cancel any time ✅ Monthly pricing based on use ✅ Can increase/decrease user base anytime ✅ 24/7 support with dedicated consultants familiar with your business 🛑 Only for cloud subscription licenses |
Having gone through the CSP vs EA comparison, there are some aspects that need to be considered in the current business landscape. Firstly, a lot of businesses are moving online, so there is an ongoing need to move operations into the cloud. Secondly, businesses need to prepare for disruption and constant change. Locking a 3-year agreement would certainly backfire for most. And thirdly, flexibility is an invaluable business asset and license models that do not meet this requirement will soon become obsolete.
With this in mind, the CSP model seems to emerge as a clear winner either way you look at it: CSP benefits vs EA or EA vs CSP pricing. The CSP model is scalable and allows businesses to adapt over time. You can make instant changes to your subscription and pay for what you use.
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Can CSPs Rise to the Occasion?
As we’ve already seen, the cloud comes with its own level of complexity — security considerations and additional costs are just some of them. As a result, this adds another level of complexity to operations as well.
As a result, CSPs need additional tools in order to rise to the occasion and deliver the level of support that organizations worldwide actually expect. They need fast access to information and reliable technology in order to help them manage the client relationship accordingly. After all, there is more to software than just cost. It all comes down to having a strong ecosystem that enables you to put that software to work — without headaches or complications.
The Partner Sales is here to contribute to this ecosystem and provide added value to Microsoft partners seeking to deliver excellent cloud services to their customers. We are a global company and our mission is to support Resellers (VARs and SIs), Software Vendors (ISVs), and Distributors as they drive the cloud promise to other businesses. In doing so, we maximize their software investments by adding new functionalities that can adjust to industry-based solutions across the globe.
