Microsoft Customers, Get Ready

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom and transportation.

Since last week's Microsoft Worldwide Partner Conference, the IT industry has been abuzz with news on Windows 8 and Microsoft's mobile app strategy. But, what about the changes that Microsoft announced to its licensing and contracting practices? Two words: get ready.

Here are several changes you can expect from Microsoft in the coming months:

  • Changes to Windows Server Pricing Model: Microsoft is changing its pricing model for Windows Server from per server to per processor. As a result, the average customer may pay 50% more. This change is expected to become effective in October, giving customers only a couple of months to navigate around the implications.
  • Transitioning to Office 365: The vendor is betting the farm on their cloud-based applications, which is becoming increasingly attractive to enterprises. However, there doesn't appear to be a clear or easy path to migrate from a traditional EA to this offering -- providing ample opportunity to overspend.
  • Qualified Desktop vs. Qualified Device: Before the cloud and BYOD, licensing was easy -- you bought one license for every qualified desktop. Now that users are accessing applications from different devices, Microsoft has changed its terminology to "qualified device" along with its product use rights. To avoid redundancies and risks associated with this still-ambiguous definition, customers will need to structure their vendor agreements for protection.
  • Get Ready for Audits: The word on the street is that Microsoft will be tripling the number of "soft" audits it conducts with customers in the coming year -- and these fall outside of routine true-ups, a process that many CIOs are struggling with as Microsoft has become more aggressive on how licenses are accounted for throughout the enterprise. NPI recently spoke with The Wall Street Journal's CIO blog about this very topic. The bottom line is that these various audits, often disguised as Software Asset Management services, only stand to help Microsoft extract more revenue from clients.

Now's the time to determine how your business will navigate and negate the impact of these changes. Without a clear strategy and resources in place to effectively negotiate, companies can expect large increases in their Microsoft spend in the coming year.

-- Jeff Muscarella, EVP of IT, NPI

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