The Power of No

By Steve Gutzman

It is important to be comfortable saying “no” in a negotiation. Not all terms need to be agreed with, not all best and final prices are best and final, and not all deals need to be done. Unfortunately, many inexperienced negotiators think they must hang on at all costs until a deal is done. For them, saying no to a deal is like saying no to a free lottery ticket … it just might be the winner, and they can’t afford to pass up the jackpot.

From the buying side, preparing for a negotiation requires an understanding of the best “no deal.” The value put on the best no-deal option sets a limit that any agreement must not exceed in order for the buyer to agree. It becomes the point that the buyer will not go above. From the selling side, the best no deal becomes the level that the seller will not go below.

William Ury, in his best-selling book Getting to Yes, calls this the BATNA, or best alternative to a negotiated agreement. According to Ury, “The BATNA is the only standard which can protect you from both accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept.” In its simplest form, this concept means that if the proposed agreement is better than the BATNA, accept it. If the agreement is not better than the BATNA, continue negotiating. If the agreement cannot be improved, consider withdrawing from the negotiations and pursuing an alternative proposal or walking away from the negotiations altogether. Each side typically knows its own limits, which must continually be assessed and reassessed as new information unfolds. The problem is that many negotiators have only a hazy sense of their own no-deal options or how to value them. At a very basic level, buyers are taught that unless they hear no at least once, they are leaving money on the table. It’s part of the process and can be an important tactic. But let’s explore the use of no from a strategic standpoint as well.

To finish reading this artcile, click here.
http://www.dobetterdeals.com/articles/tips-and-tactics/2013/009.htm

Steve Gutzman is a senior advisor at ICN and a 33-year veteran of the high-tech
industry.

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Versions, Editions, Downgrades Are Key to Microsoft License Compliance

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This is a Part 1 of 2 by Rob Horwitz, Directions on Microsoft

Customers who acquire a license for a particular product version and edition may deploy an earlier version or different edition in its place under certain circumstances. These licensing rules, called downgrade rights vary not only by sales channel where the license was purchased but also by the particular product line, including which specific version and edition was licensed. Organizations that understand downgrade rights as well as other rules associated with product versions and editions can minimize risk by avoiding common license compliance issues and save money by averting unnecessary license purchases.

How Offerings Are Categorized into Version and Edition

Generally, when a customer licenses Microsoft software, the license is for a specific version and edition of the product.

Version

  • A version is a major release of a software product, denoted by one of the following:
  • A year (for example, Windows Server Standard 2012)
  • A release number appended to an existing version (Windows Server 2008 R2)
  • A sequential number (Windows 7, Windows 8)
  • A new naming designation (Windows XP).

In addition to new features and various technical enhancements, a new product version is often accompanied by changes to the product’s use rights, licensing model, pricing, or packaging (edition lineup).

Minor updates to a particular product version—typically delivered in the form of patches, security updates, and service packs—are usually provided for free. However, the right to use new versions, regardless of whether they are acquired via perpetual or subscription licenses, involves a fee.

Perpetual licenses, the most common license type, grant the purchaser the right to use a specific product version in perpetuity. The latest version of a perpetual license can be acquired through purchase of a new license or by virtue of having active Software Assurance (SA) on a preexisting license as of the date a new version becomes available to volume licensing customers. (SA is an add-on to perpetual licenses that offers version-upgrade rights and other benefits in exchange for an annual fee based on the underlying license.) If a new product version is licensed via a subscription rather than through a perpetual license, the subscription always includes rights to use the most recent version available, as long as the subscription is active.

Edition

Microsoft commonly offers several variations of a product (or product suite), called editions. Each edition offers a different collection of product features or use rights and is sold at various price points. When a new version of a product ships, all associated editions are usually released at the same time. Some editions of a product may be specific to a particular sales channel; for example, an edition might be available through volume licensing programs only.

Common names used for editions of client-side (desktop) applications or application suites are Standard, Professional, and Professional Plus. In the case of Office suites, the main differences between editions are which individual applications, such as Access and Outlook, are included and the presence of a few specialized server integration features, such as the ability to automatically archive Outlook data to Exchange Server. Common names used for editions of server software are Standard, Enterprise, and Datacenter. What differentiates various editions of server products can vary widely depending on the particular product and product version, but common differences include technical features of interest to IT professionals rather than end users (such as scalability, high-availability, and security capabilities), use rights associated with virtualization, and, occasionally, the licensing model. Sporadically, Microsoft literature misuses the term “edition” to distinguish between the various Client Access Licenses (CALs) associated with a server product, such as the Standard CAL and Enterprise CAL for Exchange Server. (Directions considers this a misuse of terms because edition-related concepts, such as step-ups and edition downgrades, discussed below, aren’t applicable to CALs.)

Customers with active SA coverage on a lower-level edition license can exchange it for a higher-level edition license through the purchase of a Step-up License. The Step-up License fee is equal to the difference in edition license prices plus the difference in SA fees for the period remaining on the current, lower-edition SA term. (In the absence of a step-up option, a new higher-edition license would have to be purchased in full.)

Version Downgrade Rights

Version downgrade rights entitle the owner of a product license to install and run an earlier version and equivalent edition of the same product in its place; for example, allowing a customer with a Windows 8 Pro license to use Windows 7 Professional instead. By downgrading, a customer does not forfeit the right to switch to the licensed (more recent) version at some point in the future.

Version downgrade rights are important because Microsoft typically stops selling a product version once a newer version becomes available; therefore, buying the latest license and exercising version downgrade rights is often the only option for licensing an expansion in deployment of a noncurrent version. This is often important for maintaining standardized configurations. For example, today, a customer wanting to deploy a new server running Windows Server 2008 Standard edition would purchase Windows Server 2012 Standard edition (the current version) and exercise version downgrade rights. (Note that for products licensed under the CAL licensing model, if a customer downgrades the version of the server software, the CAL version need only match (or exceed) the running version, not the version of the server license. For example, if a customer with a Windows Server 2012 Standard edition server license exercises downgrade rights to run Windows Server 2008 Standard edition instead, clients need only Windows Server 2008 CALs to access this server, not Windows Server 2012 CALs.)

When downgrading, customers are responsible for finding installation media, although Microsoft’s Volume Licensing Service Center (VLSC) site generally provides at least the two prior versions of each business-related product.

Volume Licensing Offers Greatest Flexibility

The degree to which version downgrades are allowed depends on the distribution channel used to acquire the license.

Volume licensing. For licenses acquired through volume licensing programs, version downgrade rights generally provide the ability to substitute any previous version. This applies to CALs as well—for example, a SQL Server 2012 CAL may be used to license access to SQL Server 2008 R2, SQL Server 2008, or any previous version.

OEM and retail. OEM licenses for Windows Professional (and Windows Vista Business) generally confer downgrade rights to the two prior versions. For example, Windows 8 Pro licenses supplied by OEMs include the right to downgrade to Windows 7 Professional and Windows Vista Business, but not Windows XP Professional. Organizations that purchase PCs with Windows 8 Pro licenses and deploy Windows XP Professional in its place are at risk of license noncompliance. To remain compliant, the customer has a few options, including enhancing version downgrade rights by adding SA to new Windows 8 Pro PCs or purchasing new computers with Windows 7 Professional OEM licenses instead of Windows 8 Pro (an option that should be available until at least mid-2014).

Rules for other OEM licenses as well as retail licenses vary, with licenses for server software generally providing permissive version downgrade rights and licenses for client-side applications, such as Office Home and Business edition, providing no version downgrade rights at all. However, volume licensing rules allow SA to be added to many types of OEM and retail licenses within 90 days from the date the licenses are acquired (for example, to Windows Professional and Windows Server OEM licenses). If SA is added to such licenses, volume licensing’s more liberal version downgrade use rights apply.

Edition Downgrade Rights

The edition downgrade use rights, sometimes referred to as down-edition rights or cross-edition rights, allow a customer to install and run a different (generally lower-level) edition than the one purchased. Edition downgrade rights are provided for only a few Microsoft products—the most prominent being Windows Server and SQL Server. They are commonly used in conjunction with version downgrade rights to allow a customer to deploy an earlier version of a different edition of the product. One example is running a SQL Server 2008 R2 Standard edition instance on a computer that is assigned a SQL Server 2012 Enterprise edition license. There are two major reasons why edition downgrade rights are occasionally provided.

Edition eliminated. Sometimes Microsoft removes an edition from a product’s edition lineup. Since the company typically ceases sales of all editions of a product version once a newer version becomes available, buying the latest license and exercising edition downgrade rights (combined with version downgrade rights) is often the only option for licensing expanded use of an old edition. For example, with the introduction of Windows Server 2012, there is no longer an Enterprise edition; customers can run past versions of Enterprise edition (such as Windows Server 2008 R2 Enterprise) by acquiring Windows Server 2012 Standard or Datacenter edition licenses and exercising edition downgrade rights.

Simplify virtualization. The second major reason for providing edition downgrade rights is to simplify licensing for virtualization scenarios. Often customers want to consolidate new as well as legacy server workloads by running multiple instances of a product on the same physical hardware, with each instance in its own virtual machine (VM). Higher-edition Windows Server and SQL Server product licenses (or sets of licenses) combine the right to run multiple instances of the software within VMs on the licensed hardware with edition downgrade rights so that customers do not need to be concerned with which particular edition is running within each VM. For example, a server licensed for Windows Server 2012 Datacenter and SQL Server 2012 Enterprise can be used to run VMs that are a mix of new and old Windows Server and SQL Server versions and editions.

Part 2 of Versions, Editions, Downgrades Are Key to Microsoft License Compliance will be out on Tueasday of next week.

Thanks to Rob Horwitz and Directions on Microsoft

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