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February 2016: Your MLS Is Broken. Here's One Fix

The Puzzler's pictureThe Microsoft Licensing Statement (MLS) is a critical document for all volume licensing customers because it states what Microsoft knows about your license purchases.
It's most critical in an audit situation. If the MLS is wrong, your audit can't be accurate, and for some reason, the MLS is usually wrong in Microsoft's favor, that is, the MLS will show that the customer is short of licenses. (We worked recently with one client whose MLS had about five errors, each of which would result in million-dollar-plus compliance penalties if the customer didn't know better than the MLS.)
One area where you can count on it being short is when Microsoft grants you licenses at no cost. We had a customer who, for reasons I won't go into, was granted a bunch of Lync Plus User licenses. Looking at the MLS, they don't exist.
What does Microsoft say about that? It's up to the customer to keep a record of the grant and to show that to any auditor who comes in.
Without that data in the MLS itself, every time there's an audit, the MLS will be wrong. Every time the customer orders an MLS, it will be wrong.
And customers pay for this shortcoming because often these concession documents get lost or new staff come in and don't have the background. The documents are obscure, and with staff changes on both the customer side and the Microsoft side, people forget. MS then comes along, says "you have no Lync Plus User CALs and you owe us $3 million." The customer pays for the licenses again, because they can't show that they already own them.
Without that data in the MLS itself, every time there's an audit, the MLS will be wrong. Every time the customer orders an MLS, it will be wrong. We've seen Microsoft make some temporary corrections in the MLS to placate a customer who could prove that they owned the licenses, but those changes are only temporary.
The next time you order an MLS it will be wrong again.
Those concession records should reside in one irreproachable place--in the MLS itself. The reason these licenses don't show up there is that the license entitlements are based on transactions, and in the case of a license grant there's no transaction.
Here's my advice. Never word a license grant as a grant, concession, or licensing amendment. Instead, make it a transaction. For example, "as one-time concession, Microsoft grants the customer 10,000 Lync Plus User CALs" should be worded "As a one-time concession Microsoft will provide the customer with 10,000 Lync Plus User CALs at a cost of $0.01 each, to be invoiced by Microsoft on the signing of this agreement."
The customer should get an invoice for $100, (and it will probably be up to the customer to remind Microsoft to send it), the customer pays the bill, and now the licenses should be firmly entrenched in the MLS.
As a bonus, the customer also records the transaction in their own ledger, so their purchasing records provide additional evidence of the grant.

Feb. 2016: A Cheaper Home Use Program

We are not fans of Microsoft's Home Use Program because a) it doesn't permit commercial use, so your folks technically violate the license terms if they use the HUP edition of Office for work, b) it's incredibly expensive when you calculate the net cost per actual user, and c) it's only a rental, since if you drop SA you have to stop using the software.
Many people see the $10 or $29 price (it may vary, depending on geography or download choice) as a great deal but they keep forgetting that for each user that gets this deal they have to maintain SA on Office. That's at least $80 a year per user for most companies. So the real 3-year cost is $250.
That's assuming that everyone in your company takes advantage of it and we have never seen that.
The most we've seen is about 50%, which doubles the effective cost to $500 over three years. The HUP benefit disappears at that point, not only because you don't own anything for your money but also because that's more than most customers pay for a commercial-use perpetual Office license.
And in most cases HUP use is less than 20% of the number of Office users, which brings the customer's cost for each person who actually takes advantage of the HUP to at least $1,250 over three years, way more than the cost of just buying them a full commercial-use perpetual Office license. (We've computed this cost at over $3,000 for some customers.)
But there's an alternative to get home use rights for Office: Home Use Rights are available not only with SA on just Office, but on any component of Office.
For example, let's say you follow one of our common recommendations, to skip Office Pro and just license Office Standard, plus the Skype client. If you drop SA on Office, but maintain it on Skype you're still eligible to use the Home Use Program.
Now we're talking, because the Skype client by itself is far cheaper than Office. SA on Skype is less than $10 a year ($5.76 at an EA level D). So even if only 20% of your staff are using HUP, your effective annual cost (total companywide cost of SA on Skype, divided by the number of HUP users) can be less than than $90 over three years.
A bit better than $1,250, wouldn't you say? Even if you had to buy the Skype client and add SA to it, MPSA D Skype LSA pricing brings the cost, with 20% HUP use, under $200, and MPSA A pricing is still under $250. Again, a far cry from $1,250.
To confirm this, look at the latest Product Terms, search for "Home Use" and find the table that lists "Qualifying Desktop Application" and "Corresponding Home Use Program License."
You'll see Skype for Business 2015 listed as a qualifying license for Office 2016 (Mac or PC) HUP. There, just saved you enough money to pay for one of my great workshops. (My goal is always to make a workshop pay for itself, and I'm certain that everyone comes away with enough money-saving tips to do that.)

May. 2014: Custom Support for Windows XP at a Fraction of the Cost

With so many Microsoft products from the 2003 era, including Windows XP, leaving extended support this week, many organizations are struggling to find a good way to keep old products running a bit longer, while they find a newer product or a workaround. They may have looked at a Custom Support Agreement from Microsoft, but those are very expensive--the cost of keeping Windows XP on custom support will rise to $1,000 per device per year in 2017. An alternative, though still costly, is a bargain compared to those prices. It's a little known Microsoft alternative called Custom Support Essentials and it comes in at about a sixth of the cost of a Custom Support Agreement in some analyses I've done. I've put together a short deck that outlines the options. You'll find it on my resources page, here.

Jan. 2014: The Server and Cloud Enrollment

I'm touching base with customers and also with attendees at my Microsoft Licensing and Negotiations Workshops to alert them to an important Webinar we're hosting Feb. 6.
Titled "Microsoft's Server and Cloud Enrollment (SCE): the Good, Bad and Ugly," it covers what may be the most--it's hard to find a nice word for it--"rapacious" licensing agreement Microsoft ever came up with.
We've seen the messaging from Microsoft around this volume agreement about how you get better discounts, including on the Azure cloud, and most of this is barely true. (For example, the 15% license discount in the SCE is, according to Microsoft's logic, "better" than the 40% license discount in its predecessor, the Enrollment for Application Platform, EAP.)
What they don't talk about is how the SCE ropes in potentially thousands of servers that don't have Software Assurance. Not only must you restart Software Assurance on old servers, but you must REPURCHASE THE LICENSES.
I never speak in caps, but this is outrageous.
Don't want to follow the SCE rules? Well, the agreement requires you to turn the server off.
You heard me. You bought the license years ago, the server has ticked along nicely since then, but if you sign this agreement you need to either buy another license for it or TURN IT OFF.
Do Not Sign an SCE Unless You Have Read It Carefully and Understand Its Impact!
You can sign up for the webinar here. If you can't make it for the live webinar, check the Software Licensing Advisors site here for the replay.

Download the SCE presentation

View the Webinar

The Puzzler's Newsletter is an effort to alert customers to important changes in Microsoft's licensing rules and to negotiating strategies or issues that arrive in our consulting practice. Every month we give subscibers practical insight from our experience as negotiators for customers who are purchasing or renewing their Microsoft volume licensing agreement and also from our practice in defending customers in audit situatons. The Newsletter includes a "Question of the Month": Ask us any question about Microsoft licensing and we'lI consider answering it in the next newsletter.

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