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

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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.


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