Microsoft’s new Licensing Program

Door: Jip de Koning

Microsoft has announced a new agreement framework that will change everything 🙂 …and of course will make purchasing of Microsoft products more easy. This is how Microsoft explains it:

Microsoft’s Next Generation of Volume Licensing (NGVL) is an end-to-end transformation of Volume Licensing that includes an improved agreement structure, a more flexible and easy purchasing platform, and new systems and tools. NGVL provides greater value from a customer’s organizational assets, more purchasing flexibility so your customers can get the technology and services they need more easily, and simplified asset management.

It is a so-called new generation, so I guess a lot of things will stay the same. And when I go through all documents I cannot conclude anything else. For sure I believe some things will be better (simplified, easier purchasing and management), but a few things will stay the same:

  • Purchasing of Microsoft products will remain very complex due to:
    • Number of products
    • Amount of money involved
    • Number of partners involved
    • Competition
    • Knowledge required
    • Combination of on premise and cloud
    • Compliancy
    • …
  • Different agreements existing next to each other
    • EA
    • NVGL
    • Open (nobody knows) 🙂
  • Historical purchasing will be relevant for more than 6 years (maybe even longer)
  • Will it be cheaper? I doubt it, because the revenue numbers need to be reached

My conclusion for now that the changes for channel partners will be bigger than for customers…and basically it only will change for select customers…for now it is recommended that EA customers keep on using the Enterprise Agreement. I understand this completely, because this is already a very simple and easy program (and predictive moneymaker) to Microsoft. So why change something good? Select is a dramatic program for many reasons so I understand that Microsoft wants to change this once again. Select Plus was step 1 and now Microsoft tries to go one step further. With the integration of cloud it is also necessary, because all customers that will go for the cloud will now automatically have Software Assurance. So Microsoft will win for sure :-). Is this bad for customers? Not necessarily, but you have to pay attention maybe even more then before what you will sign.

For Channel Partners (your resellers) a few things will also change. But, very importantly, all purchases will be done indirectly, so revenue will go through the resellers, so they will keep their business. Only Professional Services (Premier Support) will be offered and sold directly. Tooling will be easier, processes will be easier (so hopefully less mistakes) and the number of clicks will be decreasing, so that’s positive.

According to Microsoft these are the key differences:
NGVL introduces an improved agreement structure, flexible purchasing and a new set of integrated systems and tools. NGVL offers a single agreement for ALL organizations regardless of size or type. NGVL also introduces:

  • A new non-expiring Master Agreement with integrated on premise software, Software Assurance, cloud and professional services purchasing
  • Purchasing Accounts (“PA”) that represent the entire organization and all entity types for easier asset management and best overall pricing
  • Flexible purchasing designed to match workload and technology solutions

What is the impact of the key differences?
First one: none (it is only a master agreement)
Second one: can be good; how it will be working in practice and being different from before remains to be seen
Third one: I am not sure what this means; sounds like marketing to me :-)

In practice, the same kind and type of people stay responsible for the purchasing; most processes on the customer side will stay the same (they need something and they will buy it and hopefully the partner delivers it)…And Microsoft makes the money…so WHAT’S NEW? 🙂
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