Johannesburg, 18 Jul 2016
Simon Peter, head of the Microsoft Licensing business unit at EOH, spoke to Ansie Vicente about the intricacies of licensing.
1. How have licensing models changed over the last few years and what effect has this had on your clients?
Microsoft Licensing models have changed dramatically over the last three years. The impact of cloud, bring your own device (BYOD) and globalisation has forced Microsoft to change its licensing model to accommodate these elements. The validity and applicability of the enterprise agreement is a major question in the minds of CIOs and business in general. The concept of an enterprise-wide commit is no longer relevant. Models have been changed to accommodate user profiles, subscription or consumption-based usage and cloud-enabled solutions. This has provided a positive spin to business. The option of having a hybrid model of licensing that includes perpetual licensing, subscription-based licensing and cloud-based licensing has given businesses the flexibility to license their environments based on actual need rather than end-user count.
2. What is EOH's philosophy around licensing? What is your go-to advice to customers?
Our approach to licensing is to adopt a 'fit for purpose' mind-set. Our 'partner for life' philosophy further enhances our relationship with our customers. We do not want to sell customers licences that are not going to be used or consumed. Our services capability gives us a great opportunity to engage with our customer intensely after concluding the licensing transaction. Our advice to customers is to get into the detail. Know what your business requires. Adopt licensing models that allow for agility. If the business grows or shrinks, you have the option to align your licensing model. Cloud is going to change the face of ICT. Your appetite for adoption is largely dependent on regulatory, network and performance measures.
3. Please expand a bit on capex vs opex costs when it comes licensing - which of these do your clients prefer?
Perpetual licensing has dominated the industry for many years. The jury is still on out on whether software licences are an asset or not. Other than the benefits of usage and compliance, software cannot be resold or be evaluated for a nett present value. This, therefore, presents the question: "Is it better to capex the licence or to opex the cost?" The introduction of subscription-based licensing has somewhat simplified this. We have seen a steady shift to subscription-based licensing, primarily in the form of Office 365. Although private sector customers prefer a capex-based model, public sector customers are more inclined to go for a subscription/opex-based model.
4. There have been complaints that Microsoft's licensing models are complex and tricky to understand. How do you respond?
The Microsoft licensing models will always be complex and rightly so. It demonstrates the alignment to changes that come through in the form of cloud, BYOD, user vs device, processor, standard vs enterprise and subscription-based licences. The challenge that Microsoft has is how to create awareness to its partners and customers effectively. This is where EOH is very strong. Our team of licensing specialists are constantly staying abreast with the various changes to the licensing models. Customers are encouraged to go through the formal training and certifications for Microsoft Licensing. It will also keep us on our toes if our customers have a good understanding of licensing. The LSP plays a critical role in managing the way in which it keeps its customer aware of the various changes to the licensing models.
5. How do you assist your customers in understanding their licensing options and requirements?
We get to know our customers. This requires intense user profiling and an in-depth understanding of the business by user, by geography and by application. Having access to Certified Microsoft Professionals is key to this conversation. If you are considering virtualisation, or streamlining your SQL footprint or moving to the cloud, you need a partner that will be able to understand the current environment, as well as design and architect the new environment. This then provides input into the various options for consideration when looking at the various licensing options.
6. Please explain how you choose between advising client to buy an enterprise agreement (EA) vs an enterprise subscription (commonly known as EAS)?
In our process of getting to know our customers, we get to understand budget cycles, payment preferences, commercial policy, strategic projects, mergers, acquisitions, global expansion, network layout, and the like. The output of this process provides input into the business case that will determine the justification for EA vs EAS. Furthermore, we will evaluate the costs associated with the management and support of the current environment. By moving components into the cloud and subscription-based licensing, customers will start to see a reduction in costs.
7. What complementary services do you offer around licensing? (Asset management? Audits? Anything else?)
The LSP is expected to manage a customer through a T-36 Framework. This is to ensure a consistent and healthy rhythm of activity during the life cycle of the customer agreement. Software asset management reviews, software assurance management, training, user profiling, technology updates and licence procurement are some of the standard services that a customer will enjoy from the LSP. EOH has a complete end-to-end offering as a Gold Microsoft Partner. As a value-add to our LSP customers, we provide assessments to the customer environment on the technologies that are under review or in a sub-optimal state. These assessments provide an 'as is' view of the environment and will make recommendations for remediation or technology consideration. If you are considering cloud, BYOD or adopting any of Microsoft's technologies, EOH will provide professional and credible input to that conversation.
8. What effect do you think the major trends in the IT world (big data/virtualisation/cloud) are likely to have on the future of licensing?
These trends are already having a major impact on licensing. Virtualisation and cloud are the two major drivers for this. Customers have the flexibility to scale down a server environment with the introduction of virtualisation. Cloud is driving the adoption of subscription-based licensing. Big data is going to increase the need for cloud-based storage, disaster recovery in the cloud and development in the cloud.
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