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Microsoft License Management: The Top 3 Compliance and Overspending Causes

Microsoft License Management: The Top 3 Compliance and Overspending Causes

Microsoft software is foundational to your business success, but has become increasingly more challenging to manage. As a result, organizations find themselves over-purchasing licenses to cover their lack of knowledge. It is also common for them to renew software not even in use and fail to protect themselves from unexpected compliance issues that can result in material, unbudgeted costs. Effective and active management of an organization’s software estate can lead to significant cost reduction, risk mitigation, and cost avoidance.

Top 3 Compliance Challenges:

1. Understanding Entitlements When License Metrics Change

Over the years, Microsoft has changed many of its product licensing metrics that govern licensing requirements for its products. Some products have moved from per-processor to per-core, others from Server Client Access License (CAL) to core, and some products, like SQL Server, have changed with nearly every version released. In many cases, the metric changes have removed some of the complexity in managing the software, but it has not removed the necessity for organizations to be aware and understand the associated licensing implications that may have been introduced with their user case. Organizations need be to be cognizant and take action to ensure they have purchased the correct number of licenses based on the updated metrics to avoid compliance issues and costly true-ups.

2. Knowing Which Use Rights Require Software Assurance

In recent years, Microsoft has started to tie additional use rights such as license mobility, failover, virtual desktop access, and disaster recovery rights to active Software Assurance (SA). However; we have found that many customers purchase licenses without SA only to find that their use case no longer complies with the current licensing terms and they are now out of compliance with a costly resolution.

3. Incomplete Purchase History = Inaccurate Entitlements and Leads to Over-purchasing

There are many flaws inherit in the Microsoft License Statement (MLS) which leads to inaccurate entitlement information. Missing agreements, entity names, and licensing grants are just a few areas where the MLS fails to include everything it should, leaving the onus on the organization to do extremely thorough research to validate and find the necessary proof to show what is truly owned. Without a complete purchase history, organizations are unable to determine their active entitlements and often fall into the trap of over-purchasing licenses in fear they will be out of compliance.

Top 3 Causes of Overspending

1. Buying the Wrong Edition and Overspending

Many organizations fail to complete a thorough needs analysis prior to purchasing applications. As a result, organizations will pay nearly double for a product with the same functionality as Standard, thinking the Professional version is inherently “better.” In a recent optimization engagement, Anglepoint found one organization could save approximately $40,000 by buying Microsoft Visio Standard Edition instead of the Professional Edition while still meeting the organizations functional and feature requirements.

2. Not Understanding the Difference Between Deployment, Usage, and License Consumption

An application that is installed does not necessarily mean it is in use. And an application installed and/or in use does not necessarily mean a license is consumed. So it is critical to understand the license entitlement and if/when a license is required. In some cases, once the product is deployed, it consumes a license. In other cases, a license is only consumed when the deployed license is in a particular environment (e.g. production). Organizations who do not meter usage of applications that consume licenses upon deployment will often overspend as they buy new licenses instead of reassigning those they already own which are not in use.

3. Falling Victim to “New Agreement Discounts”

Microsoft often puts an attractive discount on the table, especially at mid-year or at the end of their fiscal year, to incentivize customers to sign a new agreement. Many organizations sign without a complete or accurate baseline understanding of their license consumption and entitlements. This means they blindly enter the agreement and likely don’t understand potential license implications or even assess if the additional licenses offered are needed. Too often, we see organizations rush to sign a new contract promising a 15% discount but end up buying 20% more software that is not even needed and that negates out any perceived savings.

We can help

If any of these concerns resonate with you, Converge along with its strategic partner, Anglepoint, can help you to assess your entire Microsoft estate and help to determine the most cost-effective licensing agreements for your business based on your needs, objectives, and roadmap.  Contact us today

Learn more about Microsoft License Management Challenges here

Anglepoint is a global professional services firm delivering high-value Asset Management, Software License Management, Intellectual Property Management and Channel Compliance Services to fortune 1000 companies and others.