The Campaign for Clear Licensing (CCL) has today published a white paper that suggests that Microsoft stunts its own growth through licensing complexity.
The paper collates feedback from over 100 worldwide Microsoft customers on their concerns and challenges with software licensing and recommends five recommendations for positive change.
Executive Summary – Microsoft stunts its own growth through licensing complexity
- Key issues with Microsoft Licensing are tracking, licensing complexity, bundling and transitioning to new license models
- The five Campaign for Clear Licensing recommendations to Microsoft include clear measurement metrics, audit clarity, a knowledgebase and communications plan
Thank you to ITAM Review readers who contributed towards this paper, either by providing your feedback via survey on Microsoft licensing or attending our Microsoft licensing workshops in London and New York in 2015. The average organization size was 12,000 seats and respondents originated from USA 37%, UK 20%, Australasia 17%, Canada 7% and other countries 19%.
Key Issues for Microsoft customers:
- Tracking the use of Microsoft software is difficult
- Licensing is at times unnecessarily complex
- The bundling of products benefits sales objectives over customer requirements
- Not enough information is provided to support transitioning to new license programs and economic models
Whilst Microsoft is a more progressive software publisher compared to Oracle, SAP and IBM – licensing complexity is stunting their opportunities for growth:
“In comparison to similar research by the Campaign for Clear Licensing into Oracle, SAP and IBM – Microsoft is the most progressive software publisher. Microsoft promotes SAM within their partner ecosystem and has lent support to the ISO SAM standard. Feedback from Microsoft customers also suggests less hostile working relationships – especially in comparison to Oracle. However, the overwhelming feedback from our research suggests that Microsoft licensing complexity, designed to give customers choice, is stunting their own growth and getting in the way of customer innovation.
Tracking the use of Microsoft software is difficult
Desktop, mobile, datacenter, perpetual or in the cloud – Tracking the use of Microsoft software is difficult. Microsoft customers tell us it’s difficult to track what Microsoft software is being used in their environments.
50% of respondents had no SAM tool in place and 65% had no solution in place for managing Microsoft SQL Server. Feedback from respondents suggests True-ups and compliance positions are very much desktop centric with SQL server being a significant audit blind spot.
Microsoft offers reviews via it’s partners for customers to establish an effective license position, these are sales driven activities with the aim of identifying any gaps and driving the customers towards new technology and longevity in the contract. We believe these SAM engagements make customers numb to their real licensing requirements and encourage immature software management processes.
Licensing is unnecessarily complex
Microsoft’s defence for its licensing complexity is flexibility. Microsoft has many different customer types, and licensing flexibility allows them to build solutions for different types of customer at the right price. This is all well and good but there is a dire shortage of clear licensing information to support customers attempting to navigate this complexity.
Bundling suits Microsoft sales targets rather than customer requirements
Microsoft customers claim it’s difficult to unpick product bundles from Microsoft to suit their business requirements. Similarly customers tell us contract renewals are heavily driven towards pushing the latest technology rather than listening to customer requirements.
Not enough information on transitioning to new license models
Microsoft, like other veteran software companies developed in the perpetual era, is trying to swap its customers to a cloud or subscription based model. You could argue they’ve done a good job of this with 50% of respondents reporting having adopted Office 365 as a license model for Office (That is to say they use Office 365 as a license model – they might not necessarily be using Office 365 fully).
CALLS TO ACTION FOR MICROSOFT –
The Campaign for Clear Licensing recommends five steps to address the issues above:
- Clear measurement metrics – clear and open measurement metrics need to be defined and shared for each product.
- Audit clarity – A customer should not be audited / reviewed based on metrics that have not been defined in the contract and / or are publicly accessible. Microsoft should adhere to the Campaign for Clear Licensing Audit code of conduct
- Separate SAM from new business generation – SAM is a valuable practice for customers not a sales tool for licensing. Microsoft needs to promote Software Asset Management as a permanent internal business practice for customers – rather than a sales driven review process
- Knowledgebase – Microsoft customers need access to a clear and well-organized licensing knowledgebase to aid independent decision-making – including all products, versions, product use rights, and historical changes
- Communications plan – Microsoft needs an open and universal communications plan for all licensing changes. Whilst everyone appreciates the great value of the Microsoft channel – the customer should also be able to make up their own mind via a clear information and communications.
We believe that by addressing these issues Microsoft can encourage independent decision-making, increase loyalty, reduce barriers to implementation and ultimately increase revenue.
- Download: Microsoft stunts its own growth through licensing complexity https://www.itassetmanagement.net/wp-content/uploads/2015/12/CCL-Microsoft-Whitepaper-December-2015.pdf
- Graph image: https://www.itassetmanagement.net/wp-content/uploads/2015/12/CCL-Microsoft.png
- CCL logo: https://www.itassetmanagement.net/wp-content/uploads/2015/12/Campaign-for-Clear-Licensing-logo.png
If you have any questions regarding the report or feedback on Microsoft please contact me.
About Martin Thompson
Martin is also author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management.
On a voluntary basis Martin a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.
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