Have you ever considered dropping Software Assurance (SA) on certain Microsoft products? If so, you’re not alone. More and more companies are using this tactic to reduce Microsoft costs – and drastically so. At 29 percent for desktop licenses and 25 percent for server products, SA fees constitute a large portion of most enterprises’ Microsoft spend. Eliminating SA on some products can often lead to savings of 20, 30 or 40 percent off of a customer’s annual SA spend.
However, it’s not an easy decision and it’s not the right move for every Microsoft customer. SA renewal is no longer just a question of whether you need upgrades – there are many more factors to consider. Meanwhile, services such as Azure and O365 are adding to the confusion. The decision to keep or get rid of SA will only get more difficult as Microsoft emphasizes its cloud-first strategy.
Mapping out the risks and rewards of dropping SA requires methodical analysis, cost modeling and license scenario modeling. Here are some tips to get you started:
Develop a product-by-product roadmap to determine if you already have rights to what you need. Many customers overlook the fact that they will always have the right to deploy any versions that were released during their active SA term. Even if you cancel SA, you still have rights to those versions. Some customers are surprised to find that, for some products, they already have more new releases than they can absorb. Customers should also determine if they plan to deploy new releases from Microsoft that will be issued in the next four years. If not, the upgrade aspects of SA may not make financial sense for that product.
For desktop licenses, analyze the benefits of SA on a “must have” and “nice to have” basis. In true Microsoft form, even the benefits of SA are complicated to understand – so complicated that the vendor has broken their benefits list down into four categories: deploy and manage, training, support and specialized. You can view them here. The benefits each customer receives are dependent on the size and type of your agreement.
But, what do these benefits mean to you? Quantify the value of non-monetary SA benefits to your organization. Do things like training vouchers and planning services mean a lot to you? How much? New Version Rights continue to be the top reason customers purchase SA, but Office 365 transition rights are quickly becoming a close second. If O365 is on your roadmap, you can get there via SA, and you can also get there without SA. Customers need to conduct financial analysis and scenario modeling here to decide the most cost-effective path.
Other important areas to focus on are virtualization, roaming use and thin clients. These factors need to be examined methodically and thoroughly based on your current state usage, and also based on your future state usage requirements.
Then do the same for server products. The same benefits analysis performed for desktop licensing needs to be performed for server products. Quantifying the non-monetary benefits are a good place to start, although the tangible and technology benefits of SA become more important here.New version rights are of top importance, followed closely by license mobility. Microsoft is forcing customers to maintain SA to have this right. Keep in mind that unless a customer can clearly separate and divide servers away from others that have license mobility, then Microsoft requires ALL Servers to maintain SA.
If possible, run inventory reports to determine actual usage and versions that have been deployed. A historical perspective on how your organization has benefitted from SA is key in determining if it makes sense for you to keep it in the future. How have you historically leveraged the tangible and technology benefits of SA? How do you plan to use them in the future?
Performing the steps above will give you a clear view of how you benefit from SA, product by product. Most customers will find there are some areas where the cost of SA outweighs the benefits, or the need for SA simply isn’t there. This is where you’ll find savings opportunities that can easily reach seven figures or more.
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