LinkedIn and First Impressions

Steve Gutzman

By Steve Gutzman, ICN

If you’re a Millennial, you’ve no doubt had the parental talk about being careful with what you put on your Facebook page. After all, colleges and companies routinely include this as part of their admission screening, and one odd entry may give the wrong impression. And with online fraud costing banks and insurance companies a fortune, they too are analyzing people’s online behavior. If you post an entry for public consumption that says you’re on your way to Barbados for a much-needed two-week vacation and are burglarized the next day, do you have a claim?

On the business side of the fence there’s LinkedIn – the de facto social media page for business. Any “parental advice” needed here? Surely this group is meticulously prudent about what they post. Unfortunately, despite plenty of articles written about “social selling,” most dismiss it as a passing fad — for what else could explain why a “star” salesperson for an elite enterprise software vendor would feature a margarita in their profile picture?

The VP of sales of a software company recently shared with his sales team one of those mysterious “industry statistics,” claiming that 70 percent of their customers/prospects look at their profiles on LinkedIn. The only thing surprising about this comment is that the number is not closer to 100 percent. Why wouldn’t a buyer want to know as much as possible about the person hovering over them with a contract and pen? A little bit of research could serve up a welcoming icebreaker like this: “It appears that you have been with five software companies in the last eight years – tell me again why I should make a five-year commitment to you.”

Which begs the question: “What does your profile say about you if you are in sales?” Does it say you love your company, or does it say you’re looking for your next job? Does it say you’ve helped your clients achieve their goals, or does it say you’re a great closer? Does it say you’re a good listener and never presume to know all the answers, or does it say you’ve attended 10 straight 100-percent clubs?

The sales law of first impressions of the face-to-face kind states that you are probably not going to close a six-figure sale in under 90 seconds — but you can sure lose one. First impressions of the online kind can be just as discriminating.

Steve Gutzman is a senior advisor at ICN and a 32-year veteran of the high-tech industry. You may contact him at sgutzman@dobetterdeals.com.

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Caveat Venditor

By Steve Gutzman

George Akerlof is perhaps best known for his article “The Market for Lemons: Quality Uncertainty and the Market Mechanism,” published in 1970 – the paper for which he was awarded the Nobel Prize.  In short, it is an article about asymmetric information and the imbalance of negotiation leverage created when one side knows more about something than the other does.  Remember subprime mortgages?

An imbalance of information is exactly what characterized the technology industry for most of its recent history.  The knowledge and ultimately the negotiation leverage were clearly on the side of the vendor.  An IBM mainframe salesperson in the early ’70s described it as “having an 8th-degree black belt in a barroom brawl with a room full of drunks.”  Back then, if you wanted to know about speeds and feeds, connectivity, throughput, pricing, integration, compatibility, and support, all roads led back to the vendor sales office.  It’s no wonder that caveat emptor – let the buyer beware – became such a useful principle and that the perception of sales was aligned with adjectives such as sleazy, slick, greedy, manipulative, and unscrupulous.

The good news is that the tables have begun to turn in recent years, with buyers having access to more and more information.  This certainly applies to the technology industry, but think of all the other aspects of daily life in which information has become more transparent: buying a car, securing a loan, finding an electrician.  A few keystrokes on Edmunds, LendingTree, or Angie’s List can take the mystery out of what used to be a cumbersome and intimidating set of activities.  In fact, there is so much information available that the watchword is now caveat venditor – let the seller beware.

Some studies indicate that as much as half the traditional selling cycle is complete by the time a salesperson learns of a new opportunity.  Today the buyer can easily scope out product information, viable suppliers, sample RFPs, evaluation models, vendor scorecards, checklists, and service-level agreements from the internet with relative ease.  Conference calls with colleagues from other companies, user group meetings, and buyer conferences can also be on the menu to the more determined.  And all before the sales team is called – if they are called at all.  This “new reality,” as one Silicon Valley head of sales terms it, is forcing sales teams around the world to reevaluate how they engage with customers in everything from small-business marketing campaigns to key account sales management.  The selling strategies and tactics of just a few years ago are proving to be increasingly out of date.

However, while having access to more information may take away the specter of the lopsided barroom brawl, knowing what to do with that information is where the high-value payback occurs.  As one insurance industry executive described the rollout of their vendor management office, “This is where the heavy lifting takes place.”

The goal, however elusive, leads back to a principle that even the theoretical economist George Akerlof would agree has real-world value: “fully informed, rational actors making decisions in their best interest.”


Steve Gutzman is a senior advisor at ICN and a 33-year veteran of the high-tech industry.  You may contact him at sgutzman@dobetterdeals.com.

 

The Challenge with Buying Technology

By Steve Gutzman

  Technology – information or otherwise – has always been a tough subject to discuss, to explain, to comprehend, to predict, and most important, to buy.  Why is that?  One reason is that it is very difficult to predict its usefulness, longevity, or value over time.  Even the people who develop technology have a tough time with this.  Some examples …

“The world potential market for copying machines is 5,000 at most.”  These are the words of an IBM executive in 1959 to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production.

“There is no reason anyone would want a computer in their home.”  Such is a comment from Ken Olson, the president, chairman, and founder of Digital Equipment Corp., a manufacturer of big business mainframe computers, as he argued against the personal computer in 1977.

“There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States.”  This was Thomas Craven, Federal Communications Commission member, in 1961.  The first commercial communications satellite went into service in 1965.
But there have been some predictions that proved to be pretty accurate and quite relevant to our industry.

Moore’s Law, which was coined by Intel co-founder Gordon Moore in 1965, states that the number of transistors on a chip doubles every 24 months.  It has been the guiding principle of the high-tech industry and explains why that sector has been able to consistently announce products that are smaller, more powerful, and less costly than their predecessors – a price-performance curve that other industries can’t come close to.  The interesting thing about Moore’s Law is that it is not a law of physics.  Rather, it is just an uncannily accurate observation on what engineers and computer scientists, when organized properly, can do with silicon.

Gilder’s Law, named after the visionary author George Gilder, states that bandwidth grows at least three times faster than computer power.  This means that if computer power doubles every 24 months, then communication power doubles every eight months.  The backbone bandwidth on a single cable is now a thousand times greater than the average monthly traffic exchange across the entire global Internet five years ago.

And finally, Metcalf’s Law, named after Robert Metcalf, an originator of Ethernet and the founder of 3Com, states that the value of a network is proportional to the square of the number of users; so, as a network grows, the value of being connected to it grows exponentially, while the cost per user remains the same or is even reduced.

Whether examined separately or collectively, these three laws are driving our industry to new heights.  But they also present some big challenges for those of us who are in the “buying trenches,” for we have to figure out how to put all this breakthrough technology to good use.

What we know about the world doubles every 10 years, and information technology is leading the way.  Magnetic nanodots will soon enable storage of over one billion pages of information in a chip that is one square inch in size.  This will be followed by imaginary interfaces, iMAX at home, content-centric networking, massively parallel cortical simulators, and quantum computers.  The pace of technology invention is accelerating exponentially, and how we buy it must keep pace.  And as we will see, not only is technology changing rapidly, but our vendors are also more sophisticated in how they bring their solutions to the marketplace and in the selling techniques they use.  Therefore, we cannot rely on the old tried-and-true buying techniques of yesteryear.  We must continually upgrade our buying skills, techniques, and processes.

Remember, if you don’t have a plan on how to buy technology, you will default to the vendors’ plan on how they sell technology.

Steve Gutzman is a senior advisor at ICN and a 32-year veteran of  the high-tech industry.  You can contact him at
info@dobetterdeals.com .

Other Enterprise Agreement Choices

by: John Cullen

A traditional Enterprise Agreement (EA), commonly called a “desktop EA,” was designed to license a wide selection of products for on-premises use—especially desktop software and Client Access Licenses (CALs) for server software. This remains the main use of the EA program. However, to meet competitive threats and foster new forms of software delivery, Microsoft has, over the past few years, augmented the EA program to support alternative licensing models for some select products as well as to incorporate new online services. These three extensions to the EA program leverage all or part of the traditional desktop EA contract structure, with two implemented as separate EA Enrollments and one (hosted online services) leveraging the same Enrollment as is used for a desktop EA. (See the illustration “Enterprise Agreement Contract Structure” on page XX.)

Enrollment for Application Platform

As a separate enrollment under an EA, Enrollment for Application Platform (EAP) is another way to license server applications and developer tools, specifically SQL Server, SharePoint Server, BizTalk Server, and Visual Studio.

There are two major reasons to consider using an EAP rather than purchase the same licenses as Additional Products under the desktop EA. First, the EAP provides a way to add Software Assurance (SA) to an old server license. SA grants the customer the right to use the latest version of software and confers other benefits. Customers must normally purchase SA at the time of the original license purchase; the EAP is a noteworthy exception. The EAP allows a customer who previously skipped SA to upgrade server software without buying a new license. The second reason to consider the EAP is license cost savings. If a customer foresees a growing need for these EAP products, license acquisitions under EAP can provide savings of 15% to 40% on new licenses.

The EAP has minimum initial purchase requirements. For instance, purchases of SQL Server require a minimum of five SQL Server processor licenses, or five SQL Server server licenses and 250 SQL Server CALs.

When a customer starts a new EAP, the customer may choose between annual true-up payments (payment made at the enrollment anniversary for software deployed in previous year) and a one-time true up after three years. The annual true-up option works just as it does in a desktop EA. With the three-year true-up option, the customer makes payments at the time of initial order and at the end of the three-year initial term only. However, this option requires the customer to commit to a minimum 20% year-over-year growth in EAP license purchases and a commitment that at least 35% of purchases will be from the EAP premium offerings, which are high-end editions of SQL Server, BizTalk Server, SharePoint Server, or Visual Studio. To date, most enterprises have selected the annual true-up option.

Enrollment for Core Infrastructure

As another separate enrollment under an EA, Enrollment for Core Infrastructure (ECI) is an alternate way of licensing a server machine to run the Windows Server OS, be managed by System Center products, and be protected against viruses and other malware by Forefront Endpoint Protection. All three ECI options include Forefront Endpoint Protection plus the following other products:

  • The Standard ECI Suite includes Windows Server 2008 R2 Standard, System Center System Operations Manager Standard Management License (ML) for monitoring, System Center Configuration Manager Standard ML for software configuration and inventory, and System Center Data Protection Manager Standard ML for backup
  • The Enterprise ECI Suite includes Windows Server 2008 R2 Enterprise and System Center Server Management Suite Enterprise, which offers a superset of the System Center licenses in the Standard ECI suite
  • The Datacenter ECI Suite includes Windows Server 2008 R2 Datacenter and System Center Server Management Suite Datacenter, which offers a superset of the System Center licenses in the Enterprise ECI suite.

The ECI Suites are sometimes referred to as “Core Infrastructure Server” suites, and they are licensed with a per-processor model. This is an oddity considering that some of the included products in the suites, when licensed separately, are under a per-server model. There is a minimum initial purchase requirement of 50 ECI processor licenses of any suite, and if a customer already owns Windows Server licenses with active SA, there are means to transition those licenses into an ECI enrollment. ECI Suites may also be purchased on a subscription basis.

The primary reason to consider purchasing ECI suites is the license cost savings: ECI purchases cost up to 20% less than individual product licenses purchased separately. An added benefit is that the server suites provide some compliance convenience for those customers requiring Windows Server, System Center, and Forefront security technology for their server infrastructure.

Online Services

Some Microsoft-hosted online services for businesses are available under a desktop EA, including Office 365 (which includes Exchange, SharePoint, and Lync, and subscription rights to Office Professional Plus 2010 for customers’ local PCs), Dynamics CRM Online (Microsoft’s customer relationship management service), and Windows Intune (Microsoft’s PC management and malware protection subscription service).

These Online Services can be purchased as subscriptions under a customer’s existing desktop EA enrollment, or a new desktop EA enrollment can be started for the express purpose of licensing Online Services. Microsoft allows customers to either start new users with Online Services or transition existing on-premises users to and from Online Services. A customer may order Online Services through the desktop EA without the purchase of any Enterprise Product (Windows OS upgrade, Office Professional Plus, or the Enterprise CAL or CAL Suites); however, in this case the customer must initially purchase a minimum of 250 subscriptions for users or devices. Different program rules and requirements apply to purchasing Online Services, but these terms are now incorporated into the EA. For instance, customers can convert on-premises CAL suites into Online Services licenses per the license transition rules of the EA.

About the Author:

John Cullen is a Research VP at Directions on Microsoft, an independent analyst company and ICN partner that provides detailed research about Microsoft technologies and licensing policies. Prior to joining Directions on Microsoft, John spent nine years at Microsoft and was a senior product manager for Windows Server.

Enterprise Cloud Licensing Rules Clarified

Newly-published licensing rules clarify how organizations can reassign licenses to multitenant servers hosted by a service provider, an important option for putting Microsoft-based systems into the cloud.

Organizations that move licenses to cloud hosting providers should note important differences in the rules, because they will remain responsible for license compliance

By John Cullen, Directions on Microsoft

Use rights published in July 2011 clarify how customers can move licenses bought in volume licensing to cloud hosting providers. This “license mobility through Software Assurance” licensing option, a benefit of Microsoft’s Software Assurance (SA) program, provides one way for customers to move Microsoft server-based applications into off-premises data centers hosted by Microsoft service provider hosters, who in turn can reduce infrastructure and management costs. The new use rights reveal important differences between licensing products on-premises, and licensing them off-premises with license mobility through SA. Customers and service provider hosters will need to study these differences, because the new use rights could mean that an on-premises software architecture would require additional licenses when moved to the cloud.

Moving Licenses to Cloud Service Provider Hosters

The new use rights were published in the July 2011 Product Use Rights (PUR) document, which repeats and supplements the software license terms of products with additional rights and restrictions affecting volume licensing customers. The use rights concern movement of licenses bought in Microsoft volume licensing programs from on-premises servers to servers at service provider hosters. Longstanding Microsoft policy allows volume licensing customers to move licenses for server applications from on-premises servers to servers located at a third-party service provider hosters, as long as the servers at the hoster are dedicated to (i.e., used exclusively by) the customer owning the license. In July 2011 Microsoft added license mobility under SA, which allows customers with active SA to move many types of server licenses to a service provider hoster’s multitenant servers, which are shared with other hosting customers.

Movement of on-premises licenses to a service provider hoster’s dedicated or multitenant servers are valuable options for customers who want to outsource management of Microsoft-based systems. When customers move existing licenses to servers at a service provider hoster (the cloud), this frees the service provider hoster from having to pay Microsoft Service Provider License Agreement (SPLA) rental fees for those licenses.

Differences between On-Premises and the Cloud

Licenses moved to service provider hosters under license mobility through SA do not always grant the same rights that those licenses do on-premises. Some of the differences benefit customers and service provider hosters by simplifying compliance, but others limit the types of workloads that can be handled by the licensed systems off-premises. (See the chart “How On-premises and Cloud Virtualization Use Rights Differ” below.)

The most important differences concern the use rights for licensing multiple operating system environments (OSEs) on a server. An OSE refers to an OS instance running on either a physical or virtual server. In the vast majority of cases, a server will have multiple OSEs because it is hosting multiple virtual machines (VMs), each with its own OSE. Consequently, the license mobility through SA use rights for OSEs affect how service provider hosters may use VMs and virtualization to run software for customers.

The three major ways use rights can differ under license mobility through SA are as follows:

Fewer operating system environments (OSE) may be covered by a single license. If a license covers use of a product within multiple OSEs when applied to an on-premises server, in most cases it will cover only one OSE when applied to a multitenant server at a service provider hoster. For example, SQL Server Enterprise edition per-server and per-processor licenses with active SA subscriptions attached cover an unlimited number of OSEs on a licensed on-premises server (in most circumstances, under current rules). This difference can be significant for certain scenarios because, depending on architecture, the license(s) a customer uses to cover a set of on-premises workloads might be insufficient to cover the same workloads when reassigned to a service provider hoster.

Note that the right for SA customers to run SQL Server Enterprise in an unlimited number of OSEs on the licensed server will end when the next version of SQL Server ships,; thereafter each license will cover four OSEs.

If a single license covers more than one OSE when reassigned to a service provider hoster, the OSEs are not required to run on the same physical server. In the case of System Center Management Suite Enterprise (SMSE) and System Center Management Suite Datacenter (SMSD), four OSEs are covered by a single license, but the OSEs don’t have to run on the same physical server as is the case with on-premises licensing. This could work in the service provider hoster’s and customer’s favor by easing one aspect of license compliance.

Processor resources an OSE can access under a single license may increase. A Standard edition processor license for SQL Server, BizTalk Server, or Forefront Threat Management Gateway covers only one OSE in both on-premises and cloud scenarios. However, when the license is applied to an on-premises server, the OSE requires more than one processor license if it is configured to use more than one “virtual processor”, where Microsoft defines a virtual processor for licensing purposes as one physical processor’s worth of computational power (which is a very different definition than the industry-accepted technical definition of virtual processor). For example, an OSE configured to use three cores-worth of computational power on a server with two dual-core processors has access to 1.5 virtual processors and Microsoft requires customers to round up and have two processor licenses. When assigned to the cloud, the same processor license allows an OSE to utilize up to four virtual processors. Assuming a service provider hoster uses servers with four or fewer physical processors, it wouldn’t be technically possible for an OSE to utilize more than four virtual processors and thus any OSE running the Standard edition of these server applications would always be covered by moving one processor license from on-premises to the cloud.

Customer Still Responsible for License Compliance

According to Microsoft’s PUR document, customers who use license mobility through SA “will be responsible for third parties’ actions with regard to software deployed and managed on your behalf.” So contracting with a qualified “License Mobility through SA Partner” and submitting a “License Mobility Validation form” detailing the licenses being reassigned does not absolve customers of compliance responsibilities or risks. For starters, a customer’s existing on-premises asset management tools and processes will likely require augmentation or modification to track license compliance by a service provider. Furthermore, in the event Microsoft audits a service provider hoster, the audit could possibly also involve any customer who moved licenses to the service provider hoster.

Resources

Options and rules for reassigning server licenses with SA to the cloud are detailed in “Changes Reduce License Costs for Hosting” on page 20 of the June 2011 Update.

Microsoft’s quarterly PUR document is available via a link at http://www.microsoft.com/licensing/about-licensing/product-licensing.aspx. The July 2011 edition of the PUR details the expansion of license mobility rights for SA customers in “Appendix 1 – Software Assurance Benefits”.

Microsoft’s monthly Product List document, which details the license mobility through SA benefit (see the section “License Mobility through Software Assurance”), is available via a link at http://www.microsoft.com/licensing/about-licensing/product-licensing.aspx#tab=2.

The SPLA home page, is at http://www.microsoft.com/licensing/licensing-options/spla-program.aspx.

CHART: How On-premises and Cloud Virtualization Use Rights Differ

Details the server application licenses that have key differences between their on-premises licensing use rights and corresponding use rights when reassigned to multitenant servers hosted by a service provider.

Virtualization rights conferred by some Microsoft server application licenses can differ depending on whether the licenses are applied to on-premises servers or multitenant servers hosted by a service provider.

License mobility through Software Assurance (SA), a new SA benefit that applies to most server application licenses as of July 2011, allows customers with SA on server application licenses to reassign these licenses to multitenant servers at a third party service provider hoster. However, virtualization use rights are not necessarily the same when licenses are moved to the cloud. Among other things, the number of operating system environments (OSE) covered by a single license and the amount of processor resources an OSE can use under the context of a single license, can differ. (An OSE refers to an OS instance running on either a physical or virtual server; in the context of this discussion, OSE is usually synonymous with “virtual machine”.)

This chart lists server application licenses and key differences between their on-premises licensing use rights and corresponding licensing use rights when moved to multitenant servers hosted by a service provider hoster. Depending on the product, the results of moving a license to the cloud can vary significantly.

Note that the term “virtual processor” used in the chart has a specific meaning for purposes of licensing. A “virtual processor”, for purposes of licensing, is the equivalent of one physical processor’s worth of computational power (with a physical processor defined as a chip occupying a socket on the motherboard) which is a very different definition than the industry-accepted technical definition of virtual processor. As stated in Microsoft’s quarterly Product Use Rights (PUR) document, “Solely for licensing purposes, a virtual processor is considered to have the same number of threads and cores as each physical processor on the underlying physical hardware system”.

Products License On-premises Servers Hosted Multitenant Servers
SQL Server Processor license, Standard edition Each processor license covers one OSE; OSE requires more than one processor license if it is configured to use more than one virtual processor. Each processor license covers one OSE, but the OSE can use up to four virtual processors.
  Server license,Enterpriseedition SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each server license covers only one OSE, with no restrictions on the number of virtual processors used by the OSE.
  Processor license,Enterpriseedition If all the physical processors in the server are assigned a processor license, SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, but the OSE can use up to four virtual processors.
  Processor license, Datacenter edition (Datacenter edition requires all the physical processors in the server to be assigned a processor license). SQL Server can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, and the OSE can use up to four virtual processors.
Dynamics CRMExchange ServerLync ServerForefront Identity Manager

Forefront Unified Access Gateway

 

External Connector (EC) Each EC covers an unlimited number of OSEs on a licensed server. Each EC license covers only one OSE per licensed server.
BizTalk ServerForefront Threat Management Gateway Processor license, Standard edition Each processor license covers one OSE; OSE requires more than one processor license if it is configured to use more than one virtual processor. Each processor license covers one OSE, but the OSE can utilize up to four virtual processors.
  Processor licenses,Enterpriseedition If all the physical processors in the server are assigned a processor license, product can be run in an unlimited number of OSEs on the licensed server, with no restrictions on the number of virtual processors used by any OSE. Each processor license covers only one OSE, and the OSE can utilize up to four virtual processors.
SystemCenterServer Management Suites Enterpriselicense (SMSE) Requires one SMSE server license per physical server. The license allows four managed OSEs on the licensed server. Allows four managed OSEs per license; however, it is not required that the OSEs run on the same physical server.
  Datacenter license (SMSD) Requires all the physical processors in the server to be assigned an SMSD processor license. The licenses allow an unlimited number of managed OSEs on the licensed server. Allows four managed OSEs per license; however, it is not required that the OSEs run on the same physical server.

About the Author:

John Cullen is a Research VP at Directions on Microsoft, an independent analyst company and ICN partner that provides detailed research about Microsoft technologies and licensing policies. Prior to joining Directions on Microsoft, John spent nine years at Microsoft and was a senior product manager for Windows Server.

Microsoft makes changes to Select Plus – Improves Discount and Software Assurance Rules

This is the 2nd of a two-part series (the first part was out on April 1st) :    The Select Plus volume licensing program received two updates that preserve discount levels and ease license tracking and management.

Two changes to Select Plus will benefit customers by helping to preserve discount levels and making license and Software Assurance purchases easier to manage

Part 2,  By John Cullen

Initial License and SA Purchase Term Alignment

The second Mar. 2011 change alters the rules for initial purchase of licenses with SA so that the SA renewal dates of multiple purchases fall on a single affiliate anniversary date. This helps organizations to keep track of their renewal dates.

In Select Plus, purchases are made by the affiliate, a business unit or department within the organization that signed the agreement and that is allowed to make independent purchases. An affiliate designates its affiliate anniversary as either the date that it first registered under a Select Plus Agreement or the date it began using a licensed product. Until now, for orders of licenses with SA (called L & SA purchases) in Select Plus, Microsoft ignored an affiliate’s anniversary date when setting the initial term for SA. Specifically, every order for L & SA was required to include a full 36 months of SA coverage. This resulted in multiple orders of L & SA purchases that ended on different dates, giving the affiliate a large number of renewal dates to track. Microsoft mitigated the problem by aligning all SA renewals after the initial 36 months to the affiliate anniversary. This meant that the term of the first SA renewal could be between 25 and 36 months. As a result, initial orders of L & SA had staggered end dates, but their corresponding renewals made within the same year were aligned.

Under the new policy, L & SA orders will be aligned to the next third-year affiliate anniversary from the date of purchase. Therefore, L & SA orders made at any point during a year will terminate simultaneously at the next third-year affiliate anniversary date, and thus they will run from 25 months (for purchases made just before the anniversary date) to 36 months (for purchases made just after). SA renewals are then aligned for a three-year period.

This change improves and simplifies the SA purchase process by avoiding L & SA orders with different end dates for renewal. L & SA orders will align at purchase instead of waiting for alignment upon SA renewal. Customers will still need to consider timing when buying SA for a particular product; however, internal recordkeeping and renewal date tracking should be simplified.

More Like Old Select

With these two incremental changes to how Select Plus operates, customers will have greater ability to retain their discount levels as well as simpler L & SA and SA renewal asset management and tracking. These changes also make Select Plus work more like the Select program that it replaces, which will give organizations currently on Select more reason to consider the newer program. Microsoft’s announcement of the changes is at https://partner.microsoft.com/US/licensing/licensingprograms/ltvolumelicensing/vlselectplus.

 

About the Author: John Cullen is a Research VP at Directions on Microsoft, an independent publisher of information about Microsoft technologies, product roadmaps and licensing rules and programs. For more information, visit www.DirectionsOnMicrosoft.com

Microsoft makes changes to Select Plus – Improves Discount and Software Assurance Rules

This is a 2 Part Series:    The Select Plus volume licensing program received two updates that preserve discount levels and ease license tracking and management.

Two changes to Select Plus will benefit customers by helping to preserve discount levels and making license and Software Assurance purchases easier to manage

Part 1,  By John Cullen

The Select Plus volume licensing program has improved incrementally with two updates effective in Mar. 2011. One enables more companies to carry over earned discounts from year to year, and another provides more favorable terms for purchases of licenses with Software Assurance (SA) coverage, which offers version upgrade rights and other benefits. The updates make Select Plus more similar to the Select “classic” program that it replaces, and they will offer most customers better discounts that are less sensitive to purchase timing and that provide easier SA tracking and management.

What Is Select Plus?

Under the Select Plus program, customers license products at discount pricing based on the number and type of licenses purchased. License purchases yield points that determine price levels for each of three product pools: systems (mainly Windows), applications (Office and similar PC products), and servers. Of the four discount levels, A through D, level D offers the greatest discount.

Select Plus is aimed at midsize and large organizations with 250 or more PCs that want transactional, pay-as-you-go license purchasing. Select Plus offers the widest spectrum of business software of Microsoft’s volume licensing programs. Furthermore, the purchase of SA is not required with Select Plus license purchases, compared to other programs such as the Enterprise Agreement. (SA is Microsoft’s subscription-based software maintenance plan that provides version upgrades and other subscription services.)

Rollover Points for Discount Levels

The Select Plus rules for accumulating points from purchases have changed to enable customers to roll over points from year to year, which will lead to more favorable discounts and make customers less dependent on purchase timing.

At each Select Plus agreement anniversary, a compliance check is done by Microsoft to determine whether the annual points earned for each product pool still qualify the customer for their current price discount level. If the points are not sufficient, the discount level is adjusted downward by a maximum of one level (for instance, from Level B to Level A pricing).

Until now, points have not been carried over to the following year. Each customer’s agreement year began with zero points earned. For example, a Select Plus Level A customer who earned 600 points in year one (100 points more than the minimum threshold for Level A) would stay at Level A for year two and would need to earn another 500 points in year two to maintain Level A for year three. The excess 100 points earned in year one do not carry over to year two and are not applied against the 500-point minimum requirement for Level A pricing in that year.

Under the policy introduced in Mar. 2011, after an annual compliance check, points in excess of the minimum threshold for a specific price level (for example, Level A requires 500 annual points) are considered “rollover” points. These are carried over to the next agreement year. At each anniversary, the compliance check will account for any rollover points to determine whether the minimum threshold for the current price level of each product pool has been met. The Select Plus Level A customer cited above would need to earn only 400 points in the second year to maintain that price level, not 500, because the customer would benefit from 100 rollover points earned in the first year.

Unlike frequent flyer points, rollover points cannot be used whenever the customer chooses. Rollover points are always applied to the following year. Rollover points do not expire: If a customer does not select a year to use them, the points can carry over for a number of years. They will assist customers in retaining their current discount levels, thereby saving them money on license costs. This will also make discounts less sensitive to purchase timing. A customer who has already met a given discount level for the year will have no incentive to postpone additional purchases until the following year to help maintain the discount level for that year.

  Part 2 will be out early next week.

About the Author: John Cullen is a Research VP at Directions on Microsoft, an independent publisher of information about Microsoft technologies, product roadmaps and licensing rules and programs. For more information, visit www.DirectionsOnMicrosoft.com