Microsoft Product And ServicesAgreement

Paul DeGrootSenior ConsultantSoftware Licensing Advisors

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Who are Software Licensing Advisors?Who are Software Licensing Advisors?Mission: “The Customer’s Advocate”Too many customers rely only on Microsoft or a reseller, who focus on what they want to sellLeaves most customers with software they don't deploy or don't need While projects or investments with demonstrable ROI beg for funds

SLA focuses on value and fitWhat you need to buy and the best way to buy itAlign IT spending and strategies with corporate objectives and constraints

“"I've learned far more from this engagement than I expected. You really made a difference.."--High-tech manufacturing firm that reduced EA

spend by 50%

“"I've learned far more from this engagement than I expected. You really made a difference.."--High-tech manufacturing firm that reduced EA

spend by 50%

“"Your team has been absolutely fabulous..."

--Fortune 500 consumer products firm that reduced

EA spend by 60%

“"Your team has been absolutely fabulous..."

--Fortune 500 consumer products firm that reduced

EA spend by 60%

“We exceeded our expectations for these negotiations. Because we had

your intelligence, we knew what to hang on for. You really showed us the art of

the possible.” --Global 25 resource company

“We exceeded our expectations for these negotiations. Because we had

your intelligence, we knew what to hang on for. You really showed us the art of

the possible.” --Global 25 resource company

“Your financial models, worksheets, and strategies were invaluable. Outstanding work.”

--Global 100 pharmaceutical firm that reduced 3-year EA spend by more than $30 million

“Your financial models, worksheets, and strategies were invaluable. Outstanding work.”

--Global 100 pharmaceutical firm that reduced 3-year EA spend by more than $30 million

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Some of the firms our consultants have worked with:Some of the firms our consultants have worked with:Experience Microsoft Savings

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Today's PresenterToday's PresenterPaul DeGroot, Senior Consultant, Software Licensing AdvisorsIndependent analyst and consultant, covering Microsoft licensing for 15 yearsDeveloped licensing practice at Directions on MicrosoftCreator and leader of the most comprehensive workshops on Microsoft negotiations and licensingUpcoming workshops in Seattle (April 14-16) and Washington, DC. (April 29-May 2) More information at http://msftadvisors.com/workshops.html Enter code MPSAwebinar for an additional $100 off (for the first 20 to respond)

Advised hundreds of organizations on Microsoft licensing over the last 4 years300 to 125,000 seatsRealized savings of $250 to $700 per employee, saving companies >$250 millionAuthor of Microsoft Licensing ConceptsAvailable on Amazon

Overview of the MPSAOverview of the MPSAReplaces Select Plus as of July 1, 2015Like Select:Software Assurance is optional Purchase license-only (L), license with Software Assurance (LSA), renew Software Assurance (SA)

SA purchases can be prorated to coincide with agreement anniversariesDiscounts are based on “points” in “pools”Points can be aggregated from multiple purchasing entities to get better discountsUnlike Select:Online services purchases are available“Purchasing Accounts” replace “Affiliates”Microsoft Volume Licensing Center (MVLC), not Volume Licensing Services Center (VLSC)

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Agreement StructureAgreement Structure

Simpler agreement structureSome duplication with both an EA and the MPSAGreater flexibilityPurchasing Accounts can mix Commercial, Government, Academic

Master Business andServices Agreement

Enterprise Agreement

EnterpriseEnrolment

EnterpriseEnrolment

EnterpriseEnrolment

Microsoft Product and Services Agreement

PurchasingAccount

(Commercial)

PurchasingAccount

(Commercial)

PurchasingAccount

(Academic)

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Agreement DocumentationAgreement DocumentationMicrosoft Product and Services AgreementReplaces the Master Business and Services Agreement used in EAs, Select+Licensing ManualProgram details and rules. Updated periodically (at least 3x so far)Microsoft Products & Services Agreement RegistrationSets up a Purchasing AccountIdentifies the PA Contact and Domain Admininstrator

Microsoft Volume Licensing Center Access RequestEnables MVLC access for PA Contacts and their delegatesPartner Election FormIdentifies partner(s) connected to a PAMultiple partners can be connected to a single PA

OthersLicense transfers, Price Level Qualification, Administrator Change, etc.

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Purchasing AccountsPurchasing Accounts

More granular than Select AffiliatesCan be a single department, a legal entity, a functional unit, a geography, etc.One PA is always requiredThe administrator of the “master” PA is the Agreement AdministratorCan create other PAsCan view licensing transactions in all PAs, but has no power to control purchasing in other PAsOther PA administrators can only see transactions in their own PAs

Domain AdministratorTechnical role for setting up Office 365 domainsLink PAs with MVLC

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Purchasing Account VariablesPurchasing Account VariablesCentralized vs. decentralized purchasingCentralized—a few PAs. Decentralized—many PAsPrice list choicePrice list is determined by where the PA is located (billing address)SA benefitsSA benefits are calculated per PA, but can be shared with other PAsMany small PAs make it difficult to get enough SA points for some servicesBut in some cases, several smaller PAs can get more benefits than a few large PAs

Multiple partner choicesChoose one partner for online services; another for CRM; another for application platform Anniversary dateThe agreement anniversary is determined by the signing date of the first PA but other PAs can select a different anniversary date

Multiple Account TypesMultiple Account Types

A single agreement can incorporate multiple entity types, each in its own PACommercial Public Sector AcademicEach type has its own price listCommercial accounts have four discount levelsGovernment and Academic each have only oneUseful in some scenariosE.g. a hospital organization with a teaching hospital associated with a university may have an academic PA, while a separate for-profit hospital is covered by a commercial agreement

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Transferring LicensesTransferring Licenses

Licenses with SA can be transferred from Open, Select, or an EA to MSPALicenses will no longer be visible in the VLSC, but will now appear in the MVLCDiscount levels can be transferred from other agreementsTransferring licenses from a Select Plus agreement with a B discount will give the customer that discount (if its own discount is A)

Agreements can be consolidated in the MPSAE.g., subscriptions in Microsoft Online Services Agreement can be renewed in MPSA rather than MOSA

Licenses can be transferred between PAs

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License Purchases and Anniversary DatesLicense Purchases and Anniversary Dates

Licenses that have a defined term—SA, Office 365, CRM Online, etc. are pro-rated to the PA's anniversary data at purchaseOnline Services are renewed at each PA anniversary

4 months 12 months 12 months 12 months 12 months

Renew 12-month sub for 100 O365 E3

Renew 12-month sub for 250 O365 E3

Renew 12-month sub for 250 O365 E3

4-month sub for 100 O365 E3

4-month sub for 150 O365 E3

Renew 12-month sub for 250 O365 E3

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Purchasing Licenses with SAPurchasing Licenses with SA

Licenses with SA are eligible for spread paymentsPayments can be aligned to anniversary dates, but pricing is complexAdd a SQL Server core with SA four months before PA anniversaryLicense: $11,243.52, annual SA: $2,810.88SA pro-rated for 4 months of year 1, 12 months of years 2 and 3

4 months 12 months 12 months 12 months 12 months

1st payment:4/28=1/7 L4/12=1/3 SA=$1,606.22 + $936.96=$2,543.18

2nd & 3rd payments:12/28=3/7 L12/12= 1 yr SA=$4,818,65 + $2,810,88=$7,629.53

● Resellers must do manualcalculations

● Actual prices are available onlywhen a quotation is generated

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Calculating Discounts: PoolsCalculating Discounts: Pools

Pools combine similar productsSome antitrust protection against illegal “tying” of productsHelps Microsoft organize licensing models and rightsThree poolsSystems: Windows desktop OS, Windows Intune, Virtual Desktop AccessApplications: Desktop applications (Office, Project, Visio, Visual Studio) and online services that include them (Office 365 Office Pro Plus, Office 365 E3, Visio or Project Online, etc.)Servers: Client Access Licenses (CALs) and server applications and online services that include them (Office 365, Exchange Online, Azure, Bing Maps, etc.)

Discount levels are defined per poolCustomer can have A discount in Systems, B in Applications, D in Servers

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Calculating Discounts: PointsCalculating Discounts: Points

In Select Plus and the MPSA, each license is assigned a point valuePool Product Price Points $/Point

Systems Windows Upgrade $187 2 $89

Applications Office Pro Plus $508 2 $252

Office 365 Pro Plus Subscription $116.40/yr 1 $116

Servers Windows Server $883 15 $59

Windows Server CAL $31 1 $31

SQL Server Standard $898 15 $60

BizTalk Server Enterprise $44,000 200 $220

Office 365 E4 Subscription $256/yr 1 $256

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Calculating DiscountsCalculating DiscountsSelect and MPSA discounts are based on points and poolsDetermined by the number of points earned within a pool, each year

Discount can vary during the yearFirst year's purchases gets an A discount regardless of pointsAny purchase that contains enough points to bring the total in that pool to the next discount level will get the better discount

Discounts in any pool are based on purchases by all PAsDiscount level is reset on each anniversary of the master agreement (not each PA)Unused points can be carried forward to the next year

Points Per Year Discount Level % of Open NL price

500 A 99%

4,000 B 92.5%

10,000 C 85%

25,000 D 77.5%

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Software Assurance Benefits CalculationsSoftware Assurance Benefits Calculations

In other agreements, some SA benefits depend on quantities ordered or SA spendingPlanning ServicesTraining VouchersProblem Resolution phone supportIn the MPSA all benefits are based on points, with each license ordered providing one or more pointsSA benefit points cannot be combined across Purchasing Accounts

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How PA Size Can Affect SA BenefitsHow PA Size Can Affect SA Benefits

Small PAs may generate few benefitsExample, 10 PAs each have 100 points toward Planning Services DaysMinimum for 1 PSD is 200 points1,000 points provide 3 PSDsResult: Customer gets no PSDs from these PAs—none meet the minimumBut in some cases, a middle-of-the-road choice is better

If each of 10 PAs had 200 points, they would collectively be eligible for 10 PSDs, while the sum of their points, 2,000, merits only five PSDs in a single PA

If the 10 PAs were 3 PAs with 600 points each, they would get nine PSDs (3 each at 500-1,999 points)

The Future of the MPSAThe Future of the MPSAAt some point in the future the MPSA may replace Enterprise AgreementsSome slide decks show “Committed Offers,” with are likely to be enterprise-wide commitments, like those in the EAPartners have been told that Enterprise offerings will be piloted in late 2015A work in progress, with missing piecesSome products not availableMSDN subscriptionsSA Step-UpsConsumption-based Azure servicesSome Select-type government and academic agreements not available (Framework, Consortia, Government Partner agreements)Some SA benefits missingCan't convert SA 24x7 support incidents to premier, or training vouchers to planning services days

Next Generation Volume Licensing Agreement?Next Generation Volume Licensing Agreement?

Myth: “A Simpler Agreement”Fewer pages than Select?MPSA: 41 pages; Select: 37 pages

More complex than Select Plus, the most complex legacy agreementInclusion of online services with annual commitmentsContinuation of point and pool calculations and discounts that can vary during the yearPro-rated pricing for SA purchases and online servicesMultiple PA anniversariesDozens of new SKU acronyms: SL, SLSA, SSA, ECL, CALSA, MLSA, CSS, MSHS, etc.How will EAs be incorporated?Add “Qualified User” counts? Terminate true-ups?

Some RecommendationsSome RecommendationsIf you don't have a Select Plus agreement, get one nowNo new Select Plus agreements after July 1RationaleMPSA will not have global coverage until late 2015 or 2016Some products are not yet available in the MPSA and you will want more options than just the EA or SCE

Be careful in determining PA strategyMake sure that purchasing ability and financial accountability are linkedSoftware asset management processes are watertightConsider a full-time Agreement AdministratorCompliance is measured across all PAs, and the administrator has the best view of what is happening across the company

End-to-end review of pre-purchase planning, requisitions, license allocations, deployment counts, harvesting

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Software Licensing Advisors ServicesSoftware Licensing Advisors ServicesSoftWatch Software Asset ManagementDetailed insight into user interactivity guides negotiations and purchasing, particularly for Office

Always-on service and real-time dashboards automate complianceLicense ReconciliationSoftware inventory and reconciliation with Microsoft Licensing Statement, customer purchasing records

Essential service for audit defense and negotiationsKnowledge TransferCorporate Microsoft Licensing Workshops bring your people up to speed on MS licensing

Retainer AgreementsOngoing access to Microsoft licensing expertise Microsoft Services ReviewMinimize costs and ensure accurate and relevant reporting from Microsoft

Audit DefenseProactively define corporate licensing standards, protocol for audit requests

Challenge Microsoft compliance demandsM&AEvaluate assets and effective licensing position for due diligence during corporate merger or acquisition

Microsoft Negotiations and Licensing WorkshopsHow Microsoft products are licensingOn-premises, cloud, hosted

Volume licensing agreementsEA, Server and Cloud, Select, MPSA

Negotiation processes and strategiesSpecial topicsMobile devices, hosted systems, MSDN, management tools, VDI, virtualization

Seattle (April 14-16)Washington, DC. (April 29-May 2)More information at http://msftadvisors.com/workshops.html