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By | Paul Kunert 1st February 2016 17:41

Microsoft: Yes, we are going to kill off Enterprise Agreements

They are 'cumbersome, confusing' admits software titan

Microsoft has confirmed it is to gradually kill off Enterprise Agreements - volume licensing contracts so complex that a whole profit-making asset management eco-system sprang up off the back of them.

As we exclusively revealed, first evidence of this comes on 1 July when new commercial customers with sub-500 seats will no longer qualify for an EA, and instead will be asked to enrol under either a Microsoft Products and Services Agreement or a Cloud Solution Provider deal.

Customers with these existing EAs will be allowed to enrol for a final three-year term, if they so wish. Government buyers and the Server and Cloud enrolment programmes will be unaffected.

Mark Nowlan, Microsoft director of product marketing for the worldwide licensing and pricing team, admitted customers “want to do business with us simply” and this wasn’t always possible with its licensing set up.

“The evidence of that is that many of our customers have an EA and they have Open or they have an EA and they have Select, it is cumbersome, it is confusing,” Nowlan told El Chan.

MPSA first emerged late in 2013 as a new way to drag Microsoft’s licensing out of the dark ages, it was piloted with a small bunch of customers of Select Plus (EAs) the following year ahead of a full blown launch.

Under an MPSA contract, customers can add new purchasing accounts, procurement can be centralised or decentralised, and all of this is rolled up on a single payment plan. Both on-premise and online services can be included and customers can pay upfront for one, two or three years.

Microsoft claimed it moved to overhaul the 250 to 500 seat EAs first because more customers in that tier are moving to online services, and it didn’t want the purchasing method to put them off. It added SMEs are also less able to handle the complexities of EAs - which it told us were as high as for those buying licences for 250,000 seats.

Just 100 companies in the UK are currently operating under an EA that covers fewer than 500 seats, the vendor confirmed, but it didn’t have stats for other parts of the world.

The next stage of EA overhaul is coming, but Microsoft was unwilling, maybe unable, to outline the timetable of changes that it said were dependent on the “features and functionalities that customers require”.

“Our intention ultimately is to get all of our customers onto the modern platform, we are moving on a slow and very deliberate path,” said Nowlan.

Wolfgang Ebermann, EMEA president at Insight, claimed the changes were “strategically the right thing to do”, and that “long-term” MPSA and CSP will survive, “that move is spot on”. ®

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