Licensing Microsoft Software and Cloud Services – The New Commerce Experience

If you’ve ever licensed software or services from Microsoft as a company, you know how complicated it can be: the amount of possibilities and license types are endless, and you’ve completely lost track of what you do or don’t need.  

Microsoft’s goal for the next few years is to simplify the ways in which customers license software and services. Simplifying the buying experience for customers is the core element of making it easier to do business with Microsoft. In this article, we’re going to talk about the current situation if you, as an organization, want to license software and services from Microsoft (read: a complicated series of volume licensing agreements) and the future situation: the New Commerce Experience (NCE).  

Volume Licensing Agreements 

Who doesn’t know them by now, the complicated Microsoft volume licensing agreements? Despite the fact that Microsoft is working hard to simplify the licensing processes, they are still there. So, we explain what you should pay attention to when entering into a volume licensing factor. The factors to consider when purchasing a volume licensing agreement are:  

The number of licenses: How many licenses you need often depends on the size of the organization. The number of licenses is also important for which volume license agreement you can take out. For example, you can only enter into a Microsoft Enterprise Agreement (EA) if you want to license Microsoft software and cloud services for a period of three years with more than five hundred users or devices. An Open Value license, on the other hand, is suitable for smaller organizations, where only five users or devices are needed to start the license. Before you enter into a volume license agreement, it is always useful to be informed in advance.  

The choice between perpetual licenses or a subscription license: when it comes to concluding a volume license agreement, there are two options: a perpetual license or a subscription-based license. With a perpetual license for on-premises software, the organization owns the license, and the licensed software can be used for the term of the volume license agreement and forever thereafter. The second option is a subscription-based license, which allows the organization to use the software only during the term of the volume license agreement. At the end of this agreement, the organization must choose whether to renew or terminate the agreement. If an organization chooses to terminate the agreement, they must uninstall the software. Instead of permanently discontinuing, an organization can also opt for the “buy-out” option. With this option, the subscription licenses can be converted to perpetual licenses. Please note that perpetual licenses do not allow you to update to newer versions. As an example, if you are currently using Windows Server 2022, this is the version you can use in perpetuity. You won’t be able to update it to Windows Server 2025 coming out this fall.  

Whether Software Assurance is required: Many Microsoft volume licensing agreements already include Software Assurance, but not all of them. Then you are faced with a choice: does my company need Software Assurance or not? Microsoft Software Assurance, often abbreviated to SA, includes several benefits for your business, including: access to the latest software versions, enhanced technical support, and planning and implementation support. However, it is a cost, so it is wise to carefully consider whether your company really needs Software Assurance.  

Whether your organization is willing to make a commitment for the entire PC or server environment: and there is something else you should pay attention to if you are considering a volume licensing agreement. Some agreements allow customers to buy on a transactional basis, i.e. only the licenses they need, when they need them. Other agreements require a commitment where the customer typically has to count the total number of desktops in the organization, and then purchase licenses (Windows, Microsoft Office, or a CAL suite) for all devices. So before you enter into a license agreement with Microsoft, it is important to investigate whether your organization is willing to make a commitment for the entire PC or server environment.  

Do you also want a smooth transition to the New Commerce Experience? Get in touch with Q-Advise!  

The New Commerce Experience (NCE): What has changed? 

As you have just read, there are quite a few factors that you need to pay attention to if you want to license Microsoft software or services for your organization. Fortunately, there is good news: Microsoft itself also believes that this should be easier. That’s why they created the New Commerce Experience (NCE).  

NCE should provide more flexibility to meet different needs. In addition, NCE must ensure consistent agreements and policies. Initially, NCE will only apply to business customers, so for the time being not yet to non-profit organizations and educational institutions. However, we do expect that this will happen at some point. Below, we’ll tell you what the future of licensing at Microsoft will look like.  

Licensing through Cloud Solution Providers (CSP) 

The ability to license Microsoft software and/or services through a Cloud Solution Provider (CSP) has been around for a while (since 2015), but it is still part of the New Commerce Experience. CSP is a license agreement where you can purchase your cloud and software licenses directly from a (Microsoft-trained) Microsoft partner. These services are often bundled with the services of a CSP partner. So not only do you purchase a license for the software and/or services you need, but you also purchase the service from a Microsoft partner. After all, they are obliged to offer support to your organization as well.  

Licensing through the Microsoft website 

Does your organization already have a clear idea of what licenses you need, how many licenses you need, and whether they should be purchased perpetually or on a subscription basis? Then you can also opt for self-service. You can also purchase products and services directly from the Microsoft website. Currently, this only applies to the Online Services products and the Azure usage services. But in the future, more services and products will be added.  

License directly through a Microsoft sales rep 

Do you have a larger or more complex organization? Then you can choose to purchase licenses directly from a Microsoft vendor who is involved in the way organizations license. Currently, only Azure consumption services can be purchased in this way. Again, more products and services are likely to be added in the future.  

The Microsoft Customer Agreement 

Over time, Microsoft will only offer three ways to license; 1. Through a CSP partner, 2. Licensing through the Microsoft website (self-service) and 3. Directly through a Microsoft sales rep. There will be a new agreement to facilitate this: the Microsoft Customer Agreement (MCA). In this new agreement, an organization only needs to agree to the terms once, after which they can license through any of the ways just mentioned. The Microsoft Customer Agreement is currently available in the CSP program, and when you license directly with Microsoft. In the future, it will also be available if you purchase a license through a Microsoft retailer.  

Licensing Microsoft software or services through the New Commerce Experience? 

Are you a new customer at Microsoft and want to start licensing through the New Commerce Experience? Then you’re in luck, Microsoft says, Microsoft has already made it a lot easier for you than it was for your predecessors. In practice, however, it is different, which is why it is useful to be well informed and to have a good overview of which licenses you need in your organization. 

At Q-Advise we have years of experience with Microsoft products and services, including the licensing of these products and services.  

Would you like to be advised on which licenses you need and how you can best purchase them? Please contact us. Then together we will look at the current situation in your organization and which licenses are best suited to this. We can also advise you on the method of licensing.  

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