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The ABCs of Volume Licensing: Cutting through the acronym soup of Microsoft EAs, MPSAs and CSP agreements

Published: October 6th, 2016 By: IT World Canada Staff

COMPAREX

Volume licensing can be a challenging discussion and difficult for organizations to navigate. The options depend on numerous factors. There are three options we will discuss here: The Enterprise Agreement or EA; Microsoft Products and Services Agreement or MPSA; and the Cloud Solution Provider or CSP. What you choose and need depends on a number of factors, including number of users.

Let’s look at the basics.

An Enterprise Agreement or an EA combines cloud services and traditional platform software licensing. An EA offers all the enterprise features of Office 365 along with traditional platform office suites, Windows operating systems and client access licensing in one complete package. To enroll, organizations must have a minimum of 500 users, and must sign a three-year agreement term. Beyond the cloud services, an EA offers Software Assurance, On-premise software, a flexible payment schedule, pricing per user, and pricing per device. It’s a licensing model based on standardization for large-scale enterprises. With the EA, clients can achieve higher percentage discounts with the volume that comes with standardization.

An Enterprise Agreement is a direct agreement with Microsoft. This means that all billing transactions take place with Microsoft directly. Through partners such as COMPAREX Canada, annual reporting is done to assist Microsoft in attaining software usage in both location as well as platform scope.

“The EA, traditionally and historically, has also been seen as the best vehicle to acquire because of the discount as companies are making a commitment across the board,” says Moll. “Not only that, you’re making a commitment for every single user, and for a three-year period.”

The trick with an EA is the question of compliance. An organization will still have to go through a round of compliance checks associated with the licenses. This reporting needs to be signed off at each agreement anniversary by the organization utilizing the EA and for all the organizations affiliates,” says Walid Jreidini. ”So, if one of the affiliates is not compliant, it jeopardizes the whole EA.”

A disadvantage of an EA is that organizations can’t go below 500 users in order to stay at their discount level.

The Microsoft Product and Services Agreement (MPSA) is less complex when compared to an EA, it simplifies Microsoft Licensing by combining all of the terms and condition in the current Microsoft Business and Services Agreement, Microsoft Select-Plus Agreement and the Microsoft Online Services Agreement. This saves an organization money on administrative costs when evaluating agreement processing and legal review processes. An MPSA works well for hybrid or fully-integrated cloud solutions as well as traditional on premise datacenter and end-user computing solutions. The MPSA includes the full Office suite for multiple hardware platforms and software platforms such as OSX and upgrades from open source. Organizations looking at an MPSA require a minimum number of points purchased to maintain this agreement type and must sign on for a minimum one-year term. Software Assurance is optional, but it does include cloud services, on-premise software, flexible payment schedule and a pricing-per-product pool.

Unlike an EA, an MPSA is an indirect agreement with Microsoft. While an EA provides the benefits of standardization, an MPSA allows a client to pick and choose its products, and increase or decrease the number of users over the course of the contract. Organizations can pay for additional seats as they require them. The MPSA is an agreement of flexibility.

“Based on our experience with running agreements of this type, we also have tools internally where we compare head to head, the same product, the same technology, while buying it under different vehicles, and most of the time the MPSA is more advantageous,” says Jreidini. “It gives the client more flexibility, a deeper discount, saves money, and working together with a partner. It brings the entire licensing process to a deeper level.”

Finally, there’s the Microsoft Cloud Solution Provider or CSP. With a CSP, you pay for what you use. Available for cloud services only, the CSP model works well for small to medium-sized businesses that want the subscription service and who are already in the cloud.

But that is starting to change. Clients can get deeper discounts with an EA or MPSA, but a CSP works well for organizations, including larger enterprises, that are really affected by changes in the market and need action right away. A CSP can also work for clients that have a large fleet or large footprints and they need to be able to do some changes rapidly.

For example, if you have an insurance client with 4,000 employees in a corporate environment at all times, but they hire 2,000 seasonal brokers that will require additional IT staff to manage their usage, that becomes costly. So, a CSP becomes the best option because it can be managed on a monthly basis.

“But you need to work directly with COMPAREX as a partner, so you can provide those services directly and work quickly enough to cope with the changes in the economy and the business market where they are trying to achieve their business goal and go to market faster than the others.”

Correctly navigating the choice of these products depends largely on using a partner or a channel advisor. COMPAREX can play that role.

“Through digital transformation, Microsoft can no longer support the customer directly,” says Jreidini. “That’s been a very critical portion of how Microsoft sees the customer experience. When we talk about EAs we talk about the direct agreement with Microsoft, the Microsoft input, and how it helps the customer drive to more products.”

“We can use some of the benefits and help drive the customer to consuming the best products and have the proper products from the beginning and helping with their business needs and driving the value that is required under the EA,” Jreidini adds.

Keep in mind, the rules are always changing with the licensing options. On July 1, 2016, Microsoft raised the entry threshold for an EA to 500 desktops. That change made the MPSA and CSP more attractive to prospective clients.

Learn More: Navigating the Cloud and Software Asset Management with COMPAREX Solutions