Microsoft Azure designer talks up cloud licence transfers

CIOs looking to move existing software assets into the cloud but unsure about the licensing arrangements should leverage credits and other transfer services to minimise the impact, says one of the designers of Microsoft’s Azure cloud service.

Gianpaolo Carraro, director of developer and platform evangelism at Microsoft Australia, spent five years at Microsoft head office in Redmond designing the Azure cloud platform.

Carraro said it was a strategic decision to create a "twin" of Microsoft’s on-premise products into the cloud and form a link between them. However, different pricing and licensing terms will remain among the product sets.

“The licensing models are different from the Azure and public brands and we are expecting enterprises to adopt both as you can expand current needs with online offerings,” he said.

“One company kept its Exchange server for corporate staff and created new mailboxes in the cloud for new staff and contractors.”

Scott Stewart, CIO at Brisbane-based financial services firm Wilson HTM, said Microsoft’s licensing models can be complex so it was difficult for the company to coordinate a transfer of software to the cloud.

“We had an enterprise agreement and we lined up transition to cloud pricing with the expiration of enterprise agreement, so we were lucky,” Stewart said.

“If you’re starting fresh it might be different, but Microsoft needs to make it cleaner and simpler [and] if they want people to move to the cloud model they should facilitate it with a one-for-one transfer in the first year.”

Now Stewart has transferred in-house software to the cloud he is a lot happier with the pricing model which is “simpler” than the old Software Assurance.

“We didn’t even go there with the transfer of credits,” he said. “If we had an existing app we held on for new upgrades into the cloud and are moving to Office 2010 in the cloud.”

Stewart said CIOs need to be wary that licensing is a big part of the cloud ROI story.

At Microsoft, Carraro said it is “not illogical” to have transfer credits from on-premise to cloud workloads, but the comparison between the two isn't on the same level.

“It's a one-to-one comparison on how you use it, not on what you buy,” he said, citing the additional software hosting and support provided as part of a cloud contract.

In the case of Exchange, Carraro said, customers can get credits for CALs (client access licences) when moving from on-premise assets to cloud services.

“For some companies the cloud opens up a new set of opportunities,” he said. “The lower hanging fruit is cost savings, but the move to the cloud in the long run will be about innovation.”

Copyright © 2010 IDG Communications, Inc.

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