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As Flowers Bloom, Microsoft Fiscal Looms

by Stephen White  |  April 11, 2019  |  Comments Off on As Flowers Bloom, Microsoft Fiscal Looms

It’s April, the Northern Hemisphere is becoming brighter and warmer, whilst the South begins to prepare for Winter and seasonal activities shift dramatically.

Across the UK, cricket pitches are uncovered and prepared for local, County and international matches, yachts refitted through the winter are back afloat and golf courses abound with the color of spring flowers and golfing attire.

It’s also Microsoft’s Q4, unmistakably from the standpoint of this analyst. With a diary full of Microsoft contract inquiry in recent weeks, rather than my usual mix of topics, every Microsoft licensing specialist on the planet will be at peak demand through the next 12 weeks.

Last year (not for the first time) we published a roadmap  A Quintessential Roadmap for Renewing a Microsoft Enterprise Agreement which identifies key foundation and assessment steps required in advance of negotiating with Microsoft.

A series of factors are standouts within this roadmap:

  • Firstly and logically developing a plan which will begin with the end in mind.
  • Take the opportunity to right size, assess detail of requirements and license what your organization needs
  • Balancing the point above with opportunities to leverage synergies with Microsoft’s strategy

The Subscription Impact

Having earnestly committed to a cloud subscription model some 8 years ago with Office 365, Microsoft has converted many clients. Passing a milestone of 50% Office revenue being delivered by Office 365 in Q4 2017, an ever-increasing number of EAs are dominated by subscriptions to not just Office 365 but the broader cloud mix.

Those who’ve renewed Microsoft online services to date will be familiar with how prices evolve from the state of being a prospect and incentivized to adopt, to being dependent and expected to renew. Addressing that dynamic with a minimal cost impact may be the objective of many organizations renewing a Microsoft EA.

For some SMBs, this quarter is an end of an era

For a large quantity of SMBs, the EA they have in place at the end of this quarter will be their last with Microsoft. An increase in the minimum threshold seeing many with less than 500 seats which have used the Microsoft EA extending for a final three years, the window for which closes at the end of this Microsoft fiscal.

There will be a number of characteristics of the EA lost as organizations migrate away. One of the positives that perhaps is underappreciated until lost is the narrow channel of LSPs, organizations invested and specialized in the many complexities of licensing, authorized as enterprise advisors by Microsoft to enable and support the EA. Whilst LSPs will in most cases evolve to support Microsoft’s new approaches, a broader range of partners supporting those models may dilute licensing expertise.

Spring has already sprung

As for what follows, in March 2017 I wrote about the Evolution of Microsoft Licensing Programmes and note that the evolution continues as Microsoft develop the Microsoft Customer Agreement and its multiple routes to market.

In the interim, and beyond, the CSP model is somewhat the heir presumptive of alternatives for SMBs with Microsoft having signed on tens of thousands of partners to drive its growth.

As time goes on CSP will mature as available offerings and license types expand to potentially fill the EA void for SMBs. Key in the customer experience be determined by quality of delivery from such a broad range of partners.

 

NB – As an Antipodean, I must apologize to the Southern Hemisphere for the focus on Northern Hemisphere seasons!

Category: budgeting-planning-and-forecasting  cloud  driving-cost-optimization-across-the-enterprise-finance  licensing  reseller  sourcing-procurement-and-vendor-management-leaders  

Tags: cloud  enterprise-agreement  licensing  microsoft  office-365  saas  

Stephen White
Research Director
4 years at Gartner
16 years IT Industry

Stephen White is a Research Director in Gartner's IT Asset Management, Vendor Management and Procurement team, focusing on strategic licensing and negotiation strategies, asset management, and reseller engagement. Mr. White leverages his experience in software sales and consulting to assist IT leaders through his coverage of best practices in license life cycle strategy and trends, license metric and pricing practices, contract negotiations, optimizing terms and conditions, sourcing, and relationship management. Read Full Bio




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