Enterprise Cloud Suite Licensing Guide

The objective of this article is to review the publicly available documentation available on Enterprise Cloud Suite

This will look at the publicly available information upon general availability on December 1st 2014

  • This article is not intended to replace the Product Use Rights or Product List or other binding contractual documents
  • The Use Rights or Terms of Service for each Product or Version are available within the Product Use Rights
  • Further product-specific conditions or limitations on use of products are in the Product List
  • Please be aware that any licensing information could be subject to change. This document confers no rights and is provided for information purposes only.
  • Please be aware, my own emphasis may have been added to quotations and extracts from 3rd party sources.
  • As always, If you would like to book a consultation, available under NDA, please drop me a note via email

Executive Summary

  • The Enterprise Cloud Suite combines three strategic elements for Microsoft to drive adoption of Office 365, Enterprise Mobility Suite, Windows Desktop OS under a consistent Per User subscription model for the desktop
  • Windows offers a compelling Per User licensing model, but organisations should continue to track device profiles and associated underlying Windows device licenses
  • The Enterprise Cloud Suite will enable remote home working and BYOD scenarios for organisation who opt to deliver a consistent Windows experience  via a VM-based VDI (dedicated image) or VM-based VDI (shared image) delivery model to a range of device profiles.
  • The Enterprise Cloud Suite will be offered at a  advantageous price to incentivise adoption, driving ‘strategic bets’ for Windows 10, Office 365 and Enterprise Mobility Suite.
  • The Enterprise Cloud Suite is available on the Enterprise Agreement (EA) and Enterprise Agreement Subscription (EAS). Customers should understand the impact of revised True Up reporting within November 2014 contracts.

Enterprise Cloud Suite Overview

Microsoft made Enterprise Cloud Suite generally available to  Enterprise Agreement customers December 1st 2014

The updated EA purchasing vehicle  combines three strategic elements for Microsoft to drive adoption of Office 365, Enterprise Mobility Suite, Windows Desktop OS under a consistent User Subscription Licensing Model.

The ‘Cloud Desktop Platform’ packages strategic objectives for Productivity and Cloud Services with Management across Devices

Cloud Desktop

  • Microsoft Intune provides a unified Mobile Device Management (MDM) and Mobile Application Management (MAM) across PCs and devices. This now includes management of Office Mobile Apps (Word, Excel, PowerPoint) for iOS devices and restrict actions such as copy, cut, and paste outside of the managed app ecosystem.
  • Azure Active Directory Premium (AADP) provides User Identity and Federation via Active Directory Federation Services (ADFS) to enable pass through authentication with SSO experience from on premise AD to cloud service providers like Office365 and Salesforce.com. Acting as a identity broker for SaaS Apps with support for Multi Factor Authentication (MFA).
  • Later this will include Microsoft Identity Manager (MIM) in H1 2015 as an on-prem Identity and Access Management (IAM)
  • Azure Rights Management Services enabling Information Rights Management (IRM) for  Office365 Services and On Premise SharePoint, Exchange and Windows Server File Services.

EMS

  • Microsoft Office365 Enterprise E3 is a flagship SaaS subscription offering of Exchange Online, SharePoint Online and the Lync Online, Yammer and Office365 Pro Plus

Office365

Windows Enterprise and SA

This represents a move from Microsoft to provide a consistent Per User licensing vehicle to enable a future ‘Cloud Desktop’ service offering. While Windows will be integrated with cloud services running on the Azure Platform; Whether the Windows service will be reflected in a consistent subscription based commercial model for Windows 10 remains to be seen.

Cloud Desktop


Windows SA Per User

Prior to General Availability of the Enterprise Cloud Suite and Windows SA Per User licensing Windows Client OS on any device under a per-user model was not an option.

Microsoft now provide four licensing options, a ‘full’ Windows SA Per User Subscription, a ‘full’ Windows VDA Per User Subscription and an Windows SA Per User ‘Add On’ Subscription and Windows SA Per User Migration 

Windows Per User

With the Windows SA Per User Subscription, organisations can license Windows Software Assurance on a per user basis. When the license is assigned primary user, the associated primary device must be licensed with a ‘qualifying OS’.

The Windows SA Per User ‘Add On’, provides the benefit of Windows Software Assurance per User, or Windows VDA per User, at a price point that recognizes existing ongoing investment. When the license is assigned to a primary user of a primary device that is already covered with active Software Assurance, the Windows Software Assurance per User Add-on grants the licensed user with all of the benefits of Windows Software Assurance per User. When you license the primary user of a primary device that is already covered with Windows VDA, the Windows Software Assurance per User Add-on grants the licensed user with all of the benefits of Windows VDA per User.

These Windows VDA Per User Subscription allows an organisation license Windows on a per user basis, and may be assigned to any user. Each licensed user has access to Windows Enterprise without the need to track the operating system license(s) on the user’s device(s), except for devices where the software is installed locally. This provides a user-centric licensing model, providing flexible options for organisations to deploy and access Windows across devices, and does provide improved license management for Windows.

The Windows SA Per User Migration  maintains the SA Only price point that is available to customers who own perpetual licenses with Software Assurance in an Enterprise Agreement (EA) or Select Agreement. Customers with active SA will receive special pricing for transition continuity, recognizing their equity investment in previous fully paid perpetual licenses. This is now available for existing renewal customers.

[Ref: Microsoft Price List Guide, December 2014]

Per Device vs. User Comparison

Enterprise Agreement Requirements

The Windows SA Per User Subscription for customers with an Enterprise Agreement (EA) should acquire Windows SA Per User for all “Qualified Users”

  • The “Qualified User” is defined in the Enterprise Agreement enrollment as “”‘Qualified User” means a person (e.g., employee, consultant, contingent staff) who: (1) is a user of a Qualified Device, or (2) accesses any server software requiring an Enterprise Product Client Access License or any Enterprise Online Service. It does not include a person who accesses server software or an Online Service solely under a License identified in the Qualified User exemptions in the Product List.” [Ref: Enterprise Agreement Enrollment 2014]
  • “To understand what “user of a Qualified Device” means, “Qualified Device” means any device that is used by or for the benefit of Enrolled Affiliate’s Enterprise and is: (1) a personal desktop computer, portable computer, workstation, or similar device capable of running Windows Professional locally (in a physical or virtual operating system environment), or (2) a device used to access a virtual desktop infrastructure (“VDI”).
  • Qualified Devices do not include any device that is: (1) designated as a server and not used as a personal computer, (2) an Industry Device, or (3) not managed (as defined in the Product List at the start of the applicable initial or renewal term of the Enrollment) as part of Enrolled Affiliate’s Enterprise. At its option, the Enrolled Affiliate may designate any device excluded above (e.g., Industry Device) that is used by or for the benefit of the Enrolled Affiliate’s Enterprise as a Qualified Device for all or a subset of Enterprise Products or Online Services the Enrolled Affiliate has selected.”

[Ref: Enterprise Agreement Enrollment 2014]

  • The Microsoft define a ‘Primary User’ must be assigned to a License Device
  • The “Primary User” is defined as  “the user who uses a Windows Software Assurance, Windows Embedded Industry Software Assurance, or Windows VDA Licensed Device more than 50% of the time in any 90 day period.

[Ref: Product Use Rights, January 2015, Page 75]

Product Licensing Requirements

  • The Licensed Device must be ‘already licensed’ for a ‘Qualified Operating System‘ of Windows as defined in the Product List
  • The Windows SA Per User Subscription does not require Software Assurance for an assigned to the Licensed Device
  • Microsoft clarify that Windows can be locally installed in a Physical OSE on Windows Pro and Enterprise devices and additionally on “integrated” screens with a size of 10.1″ diagonally or less
  • The Windows SA Per User Add On does require Active Software Assurance or active VDA Subscription Per Device License for the Licensed Device
  • The Windows SA Per User Add On can only be purchased for the maximum number of available SA or Windows VDA Subscription
  • The ongoing software use rights acquired through the purchase of Add-on User Subscription Licenses will expire with the the expiration of the SA coverage for the Qualifying License(s), or at the end of the subscription term for the Add-On USLs.
  • The VDA Subscription License is recommended  for User Profiles without a primary work device, or not considered a “Primary User” under the Product Use Rights 

Decision Tree Windows SA

[Ref: Product List –  January 2015, Page 33–35][Ref: Product List –  January 2015, Page 34]

This diagram below provides an overall view of the licensing options for Windows Per User. (As always, please refer directly to binding documentation for confirmation), but this diagram attempts to capture different device profiles and respected software use rights:

Windows Per User Graphic

Complexity of the Per Device Model

Please be aware that the Per User model is not completely abstracted from the device profile, or the requirement underlying licenses assigned to those devices.

  • It does comparatively offer less complexity when managing home workers accessing VDI from a personal device and the associated risk of unlicensed access to a virtual desktop or walking their personal devices onto the organisation premises, something restricted under the “Roaming Use Right”.
  • Adopting the Windows Per User Subscription Model without also adopting Office365 Pro Plus on a Per User Subscription Model could lead to commercial risk from non compliance.
  • For example, if a user is assigned with a Windows SA Per User Subscription, but continues to access Office Pro Plus 2013 off-premise, relying on the ‘Roaming Use Right’ available as part of Software Assurance, this would not impact the ‘Qualified Device’ count. However, should the user walk that personal device onto organisation premises, it may inadvertently ‘pull through’ a requirement to license an extended number of devices under the ‘Qualified Device’ definition.
  • Microsoft state “Roaming Use” can be used on ‘Qualifying Third Party Device’ defined by Microsoft as “a device that is not controlled, directly or indirectly, by you or your affiliates”. Organisations should be aware of the definition of “management of qualified devices” as defined in the Product List to include domain join, on premise authentication to use applications, or install of agents to enforce anti-virus, anti-malware, enforcement of group policies, or receives data about, and, configures, or gives instruction the OS on a device, or access to Windows in a Virtual Desktop Infrastructure (VDI) outside of the off-premise “Roaming Use Right”. [Ref: Product Use Rights, January 2015, Page 9] [Ref: Product List, January 2015, Page 84]

The complexity of managing  home working VDI and uncontrolled BYOD scenarios drives the business case for a consistent Per User licensing model. Microsoft will continue to incentivise procurement under the Per User licensing model available for solutions and services within the Office365 and Azure portfolio to drive adoption of a ‘cloud desktop’ under a subscription or relational procurement model.

Windows Per Device Graphic


The Enterprise Cloud Suite

Microsoft now provide three licensing options on the price list to purchase the Enterprise Cloud Suite  a ‘full’ Cloud Desktop Per User, a Cloud Desktop Add On and an Cloud Desktop From SA 

  • The Enterprise Cloud Suite User Subscription License (USL) or Cloud Desktop Per User includes Office 365 Plan E3, the Enterprise Mobility Suite  (EMS) and Windows Enterprise SA per User.
  • The Enterprise Cloud Suite Add-on or Cloud Desktop Add On can be added on to a Platform EA (which includes Office Pro Plus, Windows Enterprise and either the ECAL or Core CAL).
  • The Enterprise Cloud Suite From SA User Subscription License (USL)  or Cloud Desktop From SA provides the same functionality as the full priced Enterprise Cloud Suite USL, but at a beneficial price point for customers who own perpetual licenses with Software Assurance in an Enterprise Agreement (EA).  Customers with active SA will receive an better price point incentivise transition continuity, and recognize existing equity investment in previous fully paid perpetual licenses.  This is now available for existing renewal customers
  • Customers that see Lync Voice as a part of their future roadmap, may purchase the Lync Voice Add-On. While the Lync Voice Add-On is available from December 2014, Microsoft are careful to stipulate that no provisioning will take place upon procurement of the license.

Lync Voice Add On


The Impact of 2014 Contracts

In November 2014, Microsoft updated contract packs for the Enterprise Agreement (EA), Enterprise Agreement Subscription (EAS) and Server Cloud Enrollment (SCE).

Enterprise Agreement with Add Ons

  • Microsoft have aligned the Enterprise Plan E1, Enterprise Plan E3, Enterprise Plan E4, Enterprise Mobility Suite (EMS), and Enterprise Cloud Suite (ECS) Add-Ons as “Enterprise Online Services”.
  • This will enable organisations to enroll a subset of users into a Per User licensing model or transition users over the contract term without committing Enterprise-Wide at outset of contract.
  • Microsoft continue to offer a ‘Platform’ SKU to incentivise ‘front loading’ a contract.
  • The Lync Voice Add-On is currently aligned as an ‘Additional Product’ enabling ‘price lock’ and not categorizing Lync Voice as an ‘Enterprise Online Service’.

Enterprise Online Services Only EA

  • Organisations that sign an Enterprise Agremeent (EA) or Enterprise Agreement Subscription (EAS) for ‘Enterprise Online Services Only EA‘ must meet the minimum order requirements of the respective enrollment of 250 Enterprise Online Services USLs, including Enterprise Plan E1, Enterprise Plan E3, Enterprise Plan E4, Enterprise Mobility Suite (EMS), and Enterprise Cloud Suite (ECS), From SA and Full USLs  and Microsoft Intune Full USLs but no enterprise-wide commitment is required.
  • Enterprise Online Services can be reduced to a minimum of 250 USLs at Anniversary
  • Notably, All ‘Additional Products’ are eligible to be added to the contract

True Up Policy

A principle impact to organisations will be in the approach to the annual True Up. Updated wording in the contracts could significantly impact customers that have seasonal or other annual deployment fluctuations to impact the total cost of ownership (TCO) of a Microsoft Enterprise Agreement

This new approach, effective for customers signing the revised contracts is defined as follows for the Enterprise Agreement enrollment:

“True-up Requirements. Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order. If there are no changes, then an update statement must be submitted instead of a true-up order.

(i) Enterprise Products. For Enterprise Products, Enrolled Affiliate must determine the number of Qualified Devices and Qualified Users (if ordering user-based Licenses) at the time the true-up order is placed and must order additional Licenses for all Qualified Devices and Qualified Users that are not already covered by existing Licenses, including any Enterprise Online Services.

(ii) Additional Products. For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the initial order, the last true-up order or the prior anniversary date and submit a true-up order that accounts for any increase.”

For the counting of Enterprise Products, the wording in the enrollment does have an apparent conflict, that accounts for “any changes” over the term or since the last anniversary, but later also under the term Enterprise Products “at the time the true-up order is placed”.

Taken in a wider context for customers renewing other enrollments, this tactical editing of the November 2014 also extends to the Server Cloud Enrollment :-

“(ii) True-up order. Enrolled Affiliate must determine the maximum number of Products used since the latter of the initial order the last true-up order, or the Enrollment’s prior anniversary and submit a true-up order that accounts for any increase.” [Ref: Server Cloud Enrollment 2014]

This approach has been reflected in other guidance, including deployment of the Microsoft Assessment and Planning Toolkit (MAP):

“The Microsoft Assessment Planning (MAP) Toolkit features an IT-based Software Usage Tracker functionality that provides usage reports for the following server products: Windows Server, Exchange Server, SQL Server, SharePoint Server, and System Center Configuration Manager. This automated software asset management–related functionality is designed to be used by Microsoft Volume Licensing customers. The Software Usage Tracker provides you with a view of your actual server usage, which can be valuable for comparing with your purchased CALs, or for True-up and agreement renewal discussions.” [Ref: EA Program Guide]

This change in written terminology may incentivise Microsoft to request metering of use over the contract term, or final year of a contract, to ascertain ‘maximum use’ therein driving revenues from final year True Up and subsequent renewal; underwriting the business case to move workloads to Azure

The application of this term may be applied inconsistently by Microsoft, I would recommend an agreed approach to True Up with your respective Licensing Solution Provider (LSP).


Final Thoughts

The Enterprise Cloud Suite, as a commercial licensing vehicle provides a consistent Per User licensing metric across the desktop environment and “pulls through” Windows onto a subscription procurement model. This combined suite provides an incentivised price point to drive adoption and enable the strategy for a ‘Cloud Desktop’ delivering user-centric services from Azure.  This is reflected by the recent announcements for Windows 10 that will extend Windows as a ‘universal’ platform across device profiles for Office365 and Azure services.

The licensing model ensures securement OEM licensing business model by limiting abstraction from the device profile, or the requirement for underlying Windows licenses assigned to those devices . Microsoft  continue to leverage volume licensing as a strategic tool to drive customer behaviors toward subscription services and this will continue in 2015.

Organisations should review their current and planned utilisation of Microsoft Solutions and Services to evaluate alignment with the strategic objectives of their Microsoft Account Team. Microsoft will align personnel and resources to support customers that move toward Azure and Office365 but are enabled by the 2014 contract structure to secure short term revenue generation through True Up or via Audit.

Microsoft Advisory Services

SoftwareONE provide independent consultancy services from within our Microsoft Advisory Services to optimise our clients Microsoft Strategy, including but not limited to the following benefits:

  • Knowledge Transfer on Microsoft Solutions and Services, and Licensing, from Principal Consultants from our Microsoft Advisory Practice and Technical Solutions Division
  • Confirmation of current License Entitlement and Maintenance Entitlement
  • Optimised Commercial Investment plan for Microsoft Solutions and Services
  • Commercial Analysis across Contracts and Global Pricelists
  • Assessment of Commercial Options versus Microsoft Strategic Objectives to ascertain opportunities for Negotiation Advantage
  • Managed closure support with Microsoft Global Account Manager

About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Microsoft Advisory Services – Practice Lead at SoftwareONE

As always, If you would like to reach out for a coffee or a meeting under NDA, Email or connect via Twitter or LinkedIn

Tony lives with his wife in Oxford, England.


Disclaimer

This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft product.

Please be aware that nothing in this document constitutes specific technical advice. Some of the material in this document may have been prepared some time ago and therefore may have been superseded. Specialist advice from the vendor should be taken in relation to specific circumstances.

The contents of this document are for general information purposes only. Whilst the author(s) endeavour to ensure that the information on this document is correct, no warranty, express or implied, is given as to its accuracy and the primary author or it’s contributing Authors do not accept any liability for error or omission.

The contributing authors and owner of this document shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.

This Disclaimer is not intended to and does not create any contractual or other legal rights.

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Hierarchy of Software Licensing Terms

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“Copyright has two main purposes, namely the protection of the author’s right to obtain commercial benefit from valuable work, and more recently the protection of the author’s general right to control how a work is used.”

A Plethora of Resources

It is becoming critical for organisations to understand whether the written guidance on licensing relied upon to inform IT decision makers are considered influential or ‘binding’ by the software vendor.

An organisation may often refer to written guidance and specific terms extracted from a wide range of publicly available information published by Microsoft (and other 3rd party commentators) to support their interpretation and implementation of Microsoft Software. This becomes critically important when attempting to quantify risk (in preparation or in response to a vendor audit) or in assessment of the ‘real’ total cost of ownership of new technology choices.

An organisation’s hardware environment, software deployment footprint, processes and infrastructure topology and technology choices can all be impacted by Microsoft’s commercial licensing models. This may affect the outcome of a vendor ‘review’ or official audit or contribute to unmitigated risk when considering a merger, acquisition, divestiture or sale.

Accordingly, an organisation’s IT department may have referred to guidance from a plethora or resources to inform their approach, including but not limited to:

  • Microsoft Business and Services Agreement (MBSA)
  • Volume Agreement – Master Agreement
  • Volume Agreement – Enrollment
  • Product List
  • Product Use Rights  (PUR)
  • Microsoft Websites
  • Microsoft Training Resources
  • Microsoft White Papers and Licensing Briefs
  • Written statements by Large Account Reseller (LAR) or Enterprise Software Advisor (ESA) or Software Asset Management (SAM) and IT Asset Management (ITAM) or Independent Consultants.
  • 3rd Party White Papers, Licensing Guides, Websites, Blogs and Written Statements.
  • Responses in Online Forums and Wikis.
  • Oral guidance from trusted advisors.

In the current economic climate it is increasingly important to understand what software use terms, definitions, and explanatory guidance are ‘binding’ on your organisation. If this is understood, it is possible to start understanding the total and extended risk for your organisation. It is now estimated that 1 in 4 dollars spent on IT will be aligned to risk management.


The Hierarchy of Binding Documentation

The most important documents to refer to our the Volume Agreement(s) your organisation has procured licenses through and the Product List and Product Use Rights. These contract documents are considered by Microsoft as ‘binding’ upon your organisation.

It is important to understand what Microsoft Volume Agreement(s) your organisation has signed with Microsoft. This may include, but not limited to, Select Agreement(s), or Enterprise Agreement(s) or other specialist Enterprise Enrollment(s) along with any signed contractual amendments/exceptions

These documents, in conjunction with the relevant applicable releases of the Product List(s) and Product Use Rights documents for your deployed software, are your bespoke canon to understanding the appropriate software use terms for your deployed (and planned) software footprint.

image

The diagram below illustrates the subsequent precedence of the Product List  and then illustrates the hierarchy of software use terms within the Product Use Rights. Universal License Terms will remain in effect unless explicitly retracted or amended as specified in either the General License Terms or Product-Specific License Terms and Additional Terms within the Product Use Rights.

Getting a view of all applicable terms involves a ‘little bit of reading’ (I use this phrase lightly) especially If you have both current and prior releases deployed or are trying to map existing footprint versus post-consolidation, or future requirements.

The diagram below is intended to give a ‘high level’ top-down view as to precedence of ‘binding’ documentation. While not a definitive guide for all situations, it provides an overview of the hierarchical precedence of Microsoft licensing documentation and distinguishes between ‘binding’ and ‘non-binding’ advisory documentation from Microsoft and 3rd parties.

imageimage

While its recommend to look at the source documentation, as an example, the ‘License Mobility’ rules are further amended and defined at the Product-Specific level.

image


A Comprehensive Approach

Ultimately, appropriate licensing resources should be combined with a systematic approach to discovery, metering, management, analysis, optimisation and negotiation strategy to deliver the returns your organisations demands of It’s IT.

A systematic approach could include, but not limited to:

  • Balance of extended benefits and total cost of ownership against  Vendor “lock-in”.
    • Awareness of “lock-in” when reviewing procurement models.
  • Awareness of associated rights and benefits aligned to vendor licensing and maintenance programmes:
    • Awareness of associated Extended Software Use Rights
    • Awareness of associated Product Licensing Dependencies
    • Awareness of requirements for accessing Extended Functionality
    • Awareness of requirements for special Rights of Purchase
  • Comparative analysis of available Software procurement “Packages” and “Suites” reviewed against individual product/component based procurement.
  • Understanding Impact of respective Ownership and Service Levels of Service Infrastructure from Service Providers.
  • Understanding required accreditations and reporting obligations of Service Providers. Procurement Options dependent on the Service provided.
  • Availability and Analysis of Price Protection for committed spend  versus transactional procurement model(s).
  • Fast and flexible analysis of Procurement Models, Price Lists, Global Sourcing.
  • Vendor Procurement Contract Management
  • Full Software Asset Management (SAM) and IT Asset Management capabilities.
    • Advising on optimum datacenter implementation and consolidation strategy aligned to vendor licensing metrics.
    • Access to in-house expertise (not white labelled) and resources to support multiple vendor environments.
      (Some SAM Service providers do not have in-house knowledge for Multiple Toolsets or vendor licensing models)

    • While some SAM Service providers may recommend a toolset or combination of toolsets, are they inherently toolset agnostic?
    • Secondly, do they have the global vendor relationship to access a better price (and support) for discovery and metering toolset(s).
    • If your organisation is global, a SAM Service provider with local teams to access your worldwide  location(s).
  • Vendor Negotiation Support – look for a provider with a global reach. This will reveal intelligence across regions and vendor subsidiaries in terms of available exceptions and discounts.

If you would like to have a brief exploratory conversation, in confidence (or under NDA) please drop me an email or contact me on Twitter


A Question of Interpretation

As exemplified from this extract from the Product Use Rights, explanations within the binding documentation are often ‘limited’ and indeed, Microsoft themselves may be unable to refer to wording, explanations or definitions solely in binding documentation (Product Use Rights or Product List) when seeking to explain (or enforce their view). 

Microsoft does  provide guidance that where official contract definitions are unavailable that the contract terms should be interpreted under ‘generally accepted officially recognised English words defined and protected within’ but may ultimately determine unilaterally whether an organisation has used the software in a way that conform to the limited guidance within the binding contract documents. There remains no independent regulator for the software licensing industry (as advocated by www.clearlicensing.org)

It is the personal view of the author, that an organisation should ensure that the technical reality conforms to the reasonable IT industry interpretation of the terminology of the publicly available binding documentation (where specific vendor definitions are not publicly available) of the Vendor. However, this will have limited impact If the vendor takes a different perspective.

Advisory documentation rarely refer to source ‘binding’ documentation like the Product List or Product Use Rights and increasingly, it should be recognised that Microsoft licensing briefs, white papers and training resources, and 3rd party commentators, while useful, are not contractually binding documentation.

As an example, the Microsoft ‘Multiplexing Rule’ (see previous article)was created to  protect and maintain a proportional and scalable commercial licensing model; to ensure financial protection for the software vendor for their server product(s) that will not limited by “hardware or software you use to pool connections, reroute information, reduce the number of devices or users that directly access or use the product”.

[Ref: Product Use Rights, April 2013, Page 11]

However, the  ‘Multiplexing Rule’ when reviewed solely on the limited guidance provided in ‘binding’ documents like the  Product Use Rights could potentially be used to support the widest possible interpretation of those terms. Microsoft can apply this logic unless there is an explicit exception sourced from binding documentation. Microsoft will not have to consider written terms, explanations or exceptions sourced from non-binding sources (even those written by Microsoft) even If your organisation may consider reliance on Microsoft advisory literature to inform their software deployment as fair use.

As a hypothetical example, if a member of the public accesses a public website and enters information into a web portal of an ‘eCommerce company’, it could be deemed to “access or use the product” under the ‘Multiplexing Rule’ if that data is subsequently used by some internal SQL Server(s) for internal business analytics by the eCommerce company; the general public could potentially considered licensable as an ‘external user’ and licensable for the ‘access or use’ of the internal servers use for business intelligence.

While it may seem unlikely to your IT or Security Team that a member of the general public would “access or use the product” when SQL is deployed internally for soles purposes of business analytics of (for example, analysis of anonymous and aggregated user data – by internal eCommerce staff); the overarching precedence of the Multiplexing Rule as a Universal License Term  within the Product Use Rights and ‘limited’ guidance and definitions within the Product Use Rights or Product List could potentially support the ‘widest possible’ interpretation by the Vendor (and often does).

* It is unclear how this interpretation would impact the fair use of SQL 2012 Business Intelligence Edition sold and commercially licensed only on a Server/CAL metric to eCommerce organisations.

Final Thoughts

While it is accepted than many Microsoft licensing briefs, and websites may state that they are to be used as a ‘guide only’ (while often quoted by the Microsoft subsidiary to support their own view), the customer must ultimately look to the ‘binding’ terms and extrapolate how this could be interpreted, implemented and controlled for their current and planned environment.

It is now, more often than not, that non-binding advisory documentation is of limited influence unless it directly supports the ‘current’ view of the vendor. (There is no independent ombudsman or regulator to adjudicate that interpretation) . It is therefore recommended to extrapolate the ‘widest possible’ risk assessment of vendor interpretation of your deployed software footprint when evaluating and seeking to limit risk and cost associated with enterprise software.


About

This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is a Senior Licensing Specialist at SoftwareONE

If you would like to book an in-depth Licensing Workshop / Microsoft Strategy Workshop please drop me an email or connect with me on Twitter

Tony lives with his wife in Oxford, England.


Disclaimer

This document is provided “as-is”. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. This document does not provide you with any legal rights to any intellectual property in any Microsoft or other Software Vendor product.

This article is not intended to replace the Product Use Rights or Product List or other contractual documentation.

Please be aware that nothing on this website constitutes specific technical advice. Some of the material on this website may have been prepared some time ago, may have errors, and  may have been superseded. Specialist advice should be taken in relation to specific circumstances.

The contents of this website are for general information purposes only. Whilst the author(s) endeavour to ensure that the information on this website is correct, no warranty, express or implied, is given as to its accuracy and the primary author and website owner or it’s contributing Authors do not accept any liability for error or omission.

The contributing authors and owner of the website shall not be liable for any damage (including, without limitation, damage for loss of business or loss of profits) arising in contract, tort or otherwise from the use of, or inability to use, this website or any material contained in it, or from any action or decision taken as a result of using this website or any such material.

The information presented herein is intended exclusively as a guide offered by the author(s). The publishers product use rights, agreement terms and conditions and other definitions prevail over the information provided herein.


How does the True Up Process work?

The Microsoft Enterprise Agreement has a True Up process, wherein the end-customer is responsible for an Annual Inventory of Software deployment. The Enterprise Agreement (EA) contract requires an annual report of the number of qualified devices, or in some circumstances, qualified users to determine the quantity of devices that should be increased at the anniversary.

In the diagram below, the customer has a 3 Year Enterprise Agreement, wherein, the customer is paying for License and Software Assurance (L&SA) over the Agreement term. For information purposes, this is recognised as one third of the License each year and one year of Software Assurance (SA).

During the Agreement term, the customer has added a number of additional qualified devices to the network. In the first year of the Enterprise Agreement (EA), 30 organisation iPads accessing the corporate VDI have been discovered via the SAM database. This would be added to the True Up payment for the 1st Anniversary (Start of 2nd year) etc.

For additional support also refer to the EA contracts What are the EA contract documents? and the Qualified Device definition: What is the definition of a Qualified Device?

The Enterprise Agreement True Up Requirements


Microsoft updated the timing schedule for the EA True Up in July 2011. Previously, Microsoft required the True Up order to be received between 60 prior to, or 15 days after, the Anniversary Date. This is now amended to 60-30 days prior to the next Anniversary. Microsoft request payment to be received within 30 days and the Invoice date can be set to align to the Anniversary. On the 3rd Anniversary, the order is submitted in the last 30 days with payment due within 3l0 days of receipt of invoice. Accordingly it is recommended to review SAM process and align to financial systems to support the new discovery, reporting and payment schedule(s ).

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What is the definition of a Qualified Device? (2012 Update)

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The Microsoft Enterprise Agreement (EA) is a Volume Agreement procurement contract that provides incentivised price point for customers who commit to the Microsoft technology platform.

On this basis, Microsoft has included a definition on the qualification of the devices that are licensed under the Agreement. This will contribute towards the qualified device count, and determine meeting both minimum quantity requirements, and the discount the customer receives via the Microsoft price band policy instrument (Level A-D)

The definition of the qualified device for the EA Enterprise Enrollment [1] was updated in October 2012.

The updated licensing model for Windows 8 is available here 


“Qualified Device” means any devices that is used by or for the benefit of the Enrolled Affiliate’s Enterprise and is (1) a personal desktop computer, portable computer, workstation, or similar devices capable of running Windows Professional locally (in a physical or virtual operating system environment), or (2) a devices used to access a virtual desktop infrastructure (“VDI”). Qualified Devices do not include any device that is: (1) designated as a server and not used as a personal computer, (2) an Industry Device, or (3) not managed (as defined in the Product List at the start of the applicable initial or renewal term of the Enrollment) as part of the Enrolled Affiliate’s Enterprise.

As its options, the Enrolled Affiliate may designate any device that is used by or for the benefit of the Enrolled Affiliate’s Enterprise (e.g. Industry Device) as a Qualified Device for all or a subset of Enterprise Products or Online Services that Enrolled Affiliate has selected.

“Qualified User” means a person (e.g., employee, consultant, contingent staff) who: (1) is a user of a Qualified Devices, or (2) accessed any server software requiring an Enterprise Product Client Access License or any Enterprise Online Service. It does not include a person who accesses server software or an Online Service solely under a License identified in the Qualified User exemptions in the Product List.

[Ref: EA 2012 Enrollment (Direct) EMEA EU-EFTA (October 2012)]


Overview

This represents an evolution in the way Microsoft recognise the modern corporate IT environment, building on the 2011 Agreement refresh that replaced the traditional “Qualified Desktop” definition with the new inclusive definition.

Microsoft have responded to the emergence of  new form factors and companion slate devices (IDC report that tablet owners now have an average of 6.6 devices). This expanded device definition is now more inclusive of new devices, including but not limited to, corporate and personal slate devices like the iPad or Microsoft Surface RT.

Microsoft have acknowledged BYOD scenarios, distinguishing the most basic enablement of iPhones and Android Smartphones to Exchange Active-Sync to receive Corporate Email, Calendars and Contacts; to wider requirements to access Virtual Applications or Windows OS in a Virtual Desktop Infrastructure (VDI).

Microsoft have also updated the licensing model of Windows 8 to include personal and corporate slate devices accessing from both corporate premises and remote access. Further, there is extended flexibility to include Industry Devices and devices with an embedded OS can potentially open access to better price points for CALs (Client Access License) procurement or reach a critical ‘Tipping Point’ to reach a lower Microsoft price band.

Final Thoughts

How you approach this in your organisation will have to be considered and hopefully the range of links and content within this article will assist you in beginning the process.

Your licensing requirements will be dependent on what you want users to access on your network and the functionality and experience you want them to have, Microsoft have updated and incorporated a number of access and device scenarios to support your requirements for access to Office Applications or Windows in a VDI.

Licensing can be complex, so always refer to as many dependable resources as possible, whether the Microsoft website, the Product Use Rights and Product List or your preferred Large Account Reseller (LAR).


[1] The Enterprise Enrollment is a modular procurement contract under the umbrella Enterprise Agreement (EA) that includes committed spend to one or all of: Windows 8 Enterprise Edition, Microsoft Office Professional Plus, and a choice of Client Access License Suites (Core CAL or Enterprise CAL). These platform products are licensed for every qualified device or qualified user in your organisation and can offer additional savings (and important Software Use Rights) over purchasing products separately.


Please be aware that I now work at a Microsoft Large Account Reseller (LAR)– and will now be providing my licensing expertise through their services. So please do get in contact with me directly if you would like to have a bespoke review for your organisation (available to organisations with UK operations).

My team can assist you to purchase the correct licenses, at the best price, through the right program. Please email me directly to arrange a meeting or call.

– Tony Mackelworth


What is the definition of an Affiliate?

image_thumb[4]An important definition within the Microsoft contract for an EA.

For Corporate Customers:

“Enrolled Affiliate owns or controls, Owns of controls owned Affiliate, or is under common ownership or control with enrolled Affiliate.”

“For the purposes of this definition, “ownership” means more than 50% ownership and “control” means the right granted by law to exercise decision power over administration, finances and operations.


For Government customers: “Any entity that is enrolled in the same country as the enrolled Affiliate and meets the Government eligibility criteria”. [EA2011 AgrGP (EMEA)(ENG)(Jul2011)]

In the UK, under the N39 UK Public Sector Framework Agreement “Government Customer” “means any public sector entity defined as being covered by the OGC buying solutions Trading Fund (Extension and Amendment) Order 2009.”

“For the purposes of this agreement, Government Customers shall not include:

  • Utilities as defined in the Utilities Contracts Regulations 2006;
  • Any company or entity (or any defined part of a government entity) which operates on a for-profit basis; and
  • any entity which Microsoft and Buying Solutions have specifically agreed should be excluded".

[UKPublicSectorCustomMBSA (May 2009)]


Eligibility criteria for UK Public Sector Customers under PSA09

Many UK Public Sector organisations are entitled to benefit from the special pricing and terms agreed under the Cooperation Agreement between Microsoft and Buying Solutions for Microsoft licensing to the UK Public Sector (PSA09).

In order to benefit from the PSA09 special terms and prices, your public sector organisation must first meet the eligibility criteria which Microsoft has agreed with Buying Solutions:
You are a UK public sector entity defined as being covered by the Buying Agency Trading Fund Order 1991 (as amended) with the exception of:

  • utilities as defined in the Utilities Contracts Regulations 2006;
  • any company or entity (or any defined part of an entity) which operates on a for-profit basis; and
  • any entity which Microsoft and Buying Solutions have specifically agreed should be excluded.


In order to assess if your public sector organisation is eligible we recommend you follow these steps:

  1. Are you covered by the Trading Fund?
    You must confirm you are a UK public sector entity covered by the Buying Agency Trading Fund Order 1991 (as amended) (“Trading Fund”). Buying Solutions will have provided your organisation with a unique reference number if you are covered by the Trading Fund. If you are unsure if you are covered please contact Buying Solutions at info@buyingsolutions.gsi.gov.uk.
    If your organisation is not covered by the Trading Fund but you are a public sector organisation who wishes to benefit from the PSA09 special terms and prices, the approval of both Microsoft and Buying Solutions is required; please contact licopsuk@microsoft.com indicating that you are not covered by the Trading Fund.
  2. Is your organisation a utility?
    If you are covered by the Trading Fund but your public sector organisation is a utility (as defined in the Utilities Contracts Regulations 2006) then you are not eligible for the PSA09 special terms and prices. If you wish to be considered for inclusion it will require the approval of both Microsoft and Buying Solutions; please contact licopsuk@microsoft.com , providing your unique Trading Fund reference number.
  3. Does your organisation operate on a for-profit basis?
    If you are covered by the Trading Fund but your organisation operates on a for-profit basis then you are not eligible for the PSA09 special terms and prices. For the purposes of these eligibility criteria, the following additional criteria will be applied to profit-making public sector organisations to determine whether such organisation is considered for-profit:
    • Do the revenues/profits of your organisation go solely to UK Government (no profits go to private shareholders)?
    • Is your organisation exempt from corporation tax?
    • Is your organisation financed more than 50% by UK Government (i.e., does it derive less than 50% of its funding from commercial activities)?
    • If the answer to all of these questions is “yes,” then your organisation shall not be considered for-profit.
      If the answer to any of the questions above is “no,” then your organisation shall be considered for-profit and you will not be eligible for the PSA09 special terms and prices. If you wish to be considered for inclusion it will require the approval of both Microsoft and Buying Solutions; please contact licopsuk@microsoft.com , providing your unique Trading Fund reference number. Please note that generally, government owned corporations, state-owned enterprises and government owned organisations (whether incorporated or not) undertaking commercial activities (e.g., telecommunications, banking, transportation) will not be eligible.

  4. Is your organisation eligible for Microsoft’s Educational License schemes?
    If your organisation is a government-recognised education establishment, is responsible for the administration of such establishments, is a public library or museum or is a charity then it may be eligible for Microsoft’s Educational Licence schemes which are specifically designed to meet the unique demands of the education community. Please check your eligibility for such schemes at http://www.microsoft.com/uk/education/buy/who.mspx.

If your organisation is not covered by the Trading Fund but you are a public sector organisation who wishes to benefit from the PSA09 special terms and prices, the approval of both Microsoft and Buying Solutions is required; please contact licopsuk@microsoft.com indicating that you are not covered by the Trading Fund.

Microsoft and Buying Solutions reserve the right to review and reject the status of any organisation as being eligible for the PSA09 special terms and prices. Microsoft and Buying Solutions may agree to amend these criteria at any time.

Microsoft will be updating the PSA09 Customer Overview Guide in 2012. As always, refer to specific reference documentation and work directly with Microsoft UK for confirmation.


What are the EA Contract Documents?

Here is a visual overview of the general Enterprise Agreement and Enterprise Agreement Subscription contract structure. This documentation can be provided by your preferred Microsoft Large Account Reseller.

image


Submitting Documents of Sale

Physical Documents

  1. Contract Pack is created using current Version of Documents.
  2. LAR ensures all information is present and correct.
  3. Customer Signs Documents and returns to LAR.
  4. LAR sends Documents to Licensing Operations Team via Post.
  5. Licensing Operations team check documents for Invalids and advise if necessary.
  6. Documents are sent to EOC for Processing once deemed valid.

Scanned Documents

  1. Contract Pack is created using current Version of Documents.
  2. LAR ensures all information is present and correct.
  3. Customer Signs Documents and returns to LAR
  4. LAR sends Documents to Licensing Operations Team via Scan to ukscan@microsoft.com
  5. Licensing Operations check documents for Invalids and advise as necessary.
  6. Documents are sent to EOC for Processing once deemed Valid.

eAgreements

  1. Contract Pack is created using eAgreement tool.
  2. LAR ensures all information is present and correct.
  3. Customer Signs Documents.
  4. Documents are automatically sent to EOC via eAgreements tool to begin processing.
  5. If there is an issue, the LAR can raise a CLT via www.Explore.ms

Physical Copies

  • All Physical documents need to be sent to the address below:
    • Licensing Operations Team
    • Building 5, Floor 1, Zone A
    • Microsoft Campus
    • Thames Valley Park
    • Reading
    • RG6 1WG

eAgreements

  • All documents are submitted via the eAgreements tool

Scanned Documents process

Pre-validation

  • If you would like to use the Pre-validation service please sent scanned copy of completed unsigned documents to licopsuk@microsoft.com

Please be aware that I now work at a Microsoft Partner and will now be providing my licensing expertise through their Licensing Services . So please do get in contact with me directly if you would like to have a bespoke review for your organisation (available to organisations with UK operations).

– Tony Mackelworth