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Registration Now Open for Directions on Microsoft Licensing Boot Camp - Chicago
Aug 05, 2010 (07:08 PM EDT)

Independent Analysts Offer 2-Day Intensive Course on Choosing the Right Licensing Plan and Reducing the Cost of Microsoft Licenses, Including Windows 7 Upgrades

KIRKLAND, Wash., Aug. 5 /PRNewswire/ -- The release of Windows 7 has prompted many organizations to begin planning desktop OS upgrades. In addition to planning the technical aspects of a desktop OS deployment, IT decision makers must also determine the best way to purchase the Windows 7 licenses they'll need. Options range from acquiring Windows 7 as they purchase new PCs to volume licensing programs that give companies the right to upgrade every computer in their organization immediately. Choosing the right licensing strategy can result in significant savings; choosing the wrong strategy can cost even more.

Independent analyst firm, Directions on Microsoft, offers strategic advice to organizations on Microsoft licensing in their Microsoft Licensing Boot Camps, two-day workshops that demystify Microsoft licensing programs and rules. At these popular Licensing Boot Camps, enterprise IT managers get information to intelligently evaluate their Microsoft licensing options and maximize the return on their software investments.

Below, Directions on Microsoft Research VP and Boot Camp instructor, Paul DeGroot, offers five licensing strategies for Windows 7 upgrades. It's just a sample of the type of expertise he offers during the Microsoft Licensing Boot Camps.

Five Licensing Strategies for Windows 7 Upgrades

The licensing strategies for Windows 7 upgrades described here are not exhaustive, but they do illustrate how volume licensing programs can be used to enable broader organizational goals, from saving money on software, to reducing management costs, to enabling new OS and application infrastructures. The strategies described here include companywide upgrades that cover all (including older) workstations in an organization, as well as strategies that reduce costs by targeting subsets of users or application.

Most customers will find that the scenarios described below involve a trade-off of one kind or another. The most costly scenario offers the greatest flexibility and broadest opportunities for additional services and rights. The least expensive scenario offers fewer services and options.

1. Companywide License Upgrades

For the maximum level of OS standardization, access to Windows 7 Enterprise and MDOP, and local and VDI virtualization rights, organizations should consider two Microsoft volume licensing plans, Enterprise Agreements (EAs) and Open Value Companywide, which cover all the PCs in an organization with license upgrades and SA. In these agreements, customers pay according to the number of PCs they have. EAs are available to organizations with 250 or more PCs and are the most common way for organizations with more than 1,000 computers to license their desktops, not only for the latest version of Windows but also for the latest version of Office, as well as to buy the Client Access Licenses (CALs) required to access server products such as Windows Server, Exchange, and SharePoint.

These programs can offer substantial discounts on OS upgrades, but will usually be the most expensive solutions, since they cover all PCs in the organization and require the purchase of OS upgrades (regardless of the OS already running on the organization's workstations) plus an SA subscription for each PC. Directions on Microsoft estimates that an organization with 8,000 computers would pay about US$1.6 million over a three-year period to upgrade to Windows 7 with an EA.

2. Subscription Licensing

Another approach that generates immediate standardization and offers time-limited (three years) access to Windows 7 Enterprise, virtualization rights, and other SA benefits at lower cost than an EA or Open Value Companywide is a subscription agreement—an EA Subscription or Open Value Subscription. With these agreements, the customer does not purchase licenses but pays only a subscription fee, which includes SA benefits, ranging from US$50 to US$70 each year. At the end of the subscription, customers have three choices: stop using the software, buy out the licenses for the software for an additional fee, or renew the subscription (for one or three years).

Using a subscription licensing program for Windows 7 upgrades offers cost advantages for customers because the subscription fee is less costly than purchasing an upgrade license and an SA subscription for that license. It also bypasses a major restriction on SA-only purchases—the requirement that SA must be purchased within 90 days of the PC purchase itself.

Customers purchasing a subscription to the Windows OS avoid these problems: they can immediately upgrade all of their current computers—including those well past the 90-day limit for purchasing SA—to the latest version of Windows without purchasing a full upgrade for each computer.

The subscription licensing approach is not a perfect replacement for an EA, and planning is required to avoid problems at the end of the subscription.

The next two strategies offer specific advantages.

3. Open License

This option is often ignored by enterprises because it is primarily intended for small companies. Yet, in many cases, it is the least expensive way for even an enterprise to gain access to SA benefits and entitlements for users who need them. First, although SA must be purchased for three years in many agreements, it is always purchased for two years in Open, offering an immediate 33% savings. While Open discounts are not as good as those in other programs, the shorter SA subscription makes Open pricing very competitive. Two years of SA purchased through Open License costs US$108, while three years of SA at the best EA discount level costs between US$117 and US$123 when OS licensing is first added to an EA.

4. Select License

Select offers better discounts than Open and, under some circumstances, offer the lowest SA prices. This is because Select customers purchase SA for the current and remaining years in their agreement, rather than for a full three years. Thus, a customer who purchases a new PC and adds SA to it through a Select agreement would pay as little as US$86 for two years of SA, and only US$43 for one year—long enough to get permanent rights to Windows 7 Enterprise. The recently introduced Select Plus program always requires three years of SA payments and will be useful for organizations that want to employ SA benefits, such as virtualization or MDOP components, for a subset of their organization over a longer period of time.

Directions on Microsoft estimates that an organization with 8,000 PCs that purchased SA on every new PC would pay about US$650,000 via Open License and about US$600,000 through a Select agreement over a three-year period, covering replacing 2,000 PCs each year.

5. Do Nothing

Organizations may find that most of their OS requirements can be met by OEM licensing alone. These organizations can tolerate multiple desktop OSs, upgrade their OS only when they replace PCs, and do not plan significant use of VMs or Windows 7 Enterprise features.

As an organization replaces computers, it can target advanced or mobile users by purchasing new PCs with OEM licenses for Windows 7 Ultimate, which offers the Windows 7 Enterprise feature set at a price that few volume licensing options can match. Similarly, XP Mode can handle the requirements for at least a limited subset of applications and users who need access to legacy applications.

Other licensing strategies revealed in the intensive two-day training include:

  • Evaluating and Renewing the Enterprise Agreement
  • Best Practices for Licensing in a Virtualized Environment
  • Maximizing Savings with Select
  • Evaluating Software Assurance.

Enterprises can learn Microsoft licensing in a way that is clear and concise, with no hidden agendas. For more information on the Boot Camps, visit:

About Directions on Microsoft

Directions on Microsoft is the an independent organization devoted exclusively to tracking Microsoft. Directions has studied Microsoft since 1992. Its team of Microsoft experts provides clear, concise, and actionable analysis of shifts in Microsoft strategy, Microsoft product and technology roadmaps, delivery schedules, organizational changes, marketing initiatives, and licensing and other policies, so you can quickly assess how they impact your business. Thousands of companies worldwide—including corporate purchasers of Microsoft products, system integrators, and software vendors—trust Directions on Microsoft for accurate and unbiased Microsoft research and analysis to guide their strategic decisions.

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James Teicher

SOURCE Directions on Microsoft