Strategic CIO // IT Strategy
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11/25/2013
09:06 AM
John McGreavy
John McGreavy
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Microsoft's Software Licensing: Why I've Had Enough

Our company could be so much further ahead if Microsoft would simplify its licensing terms so that non-PhDs could understand them.

We take the approach at our company that our customers' success equals our own success. It's hardly a breakthrough concept. I've never worked for Microsoft, nor am I friends with anyone who does, but I bet that the value of customers' success isn't a foreign concept to Microsoft, either.

So why, then, does Microsoft force both employees and customers to waste what must be hundreds of thousands of hours per year trying to decipher its latest software licensing logic? Customers practically need an Enigma machine.

I understand the premise: Make the licensing so utterly complicated that customers sign your all-encompassing (or so you think) Enterprise Agreements, just to relieve the pain. "Sure, you can try to figure out how to buy from a Select agreement, but can you really afford the time to find all of the land mines we've planted in there?" goes Microsoft's thought process. It's not a clever approach; it's just annoying and inefficient.

Stop it. Now, please. I buy productivity software from a company that impairs my productivity whenever I deal with it. There's something really wrong here. Our Microsoft rep is unable to help us make the correct purchase decision, and he readily admits it. We could send our staffers to Microsoft licensing courses, I'm told. My initial reaction was to suggest that our rep attend the course.

It gets better, as Microsoft now offers "Licensing Training and Accreditation for Customers." In other words, if we invest even more time and money with Microsoft, it will bestow on us formal credentials saying we've mastered its convoluted licensing. At that point, can we then approve our own price proposal? We would be accredited, after all. No, all it would mean is that our arguments with Microsoft would continue longer than they do now.

Much of the wasted time in recycling the same issue is due to a difference in opinion. We read the licensing terms and pricing our way, and then Microsoft finds someone who interprets them another way. And then we argue. I'm also aggravated with Microsoft's insistence on including products in the deal that I don't want. The more strongly we indicate we're not interested in its CRM product, for instance, the more likely the company leads every discussion with a Microsoft CRM overview.

Microsoft organized a half-day demo for us, and we arranged for many of our senior executives to attend. Our main interest was to understand the value of unified video, voice, and data communications. We have a distributed organization, with many field offices and reps. The economics of person-to-person unified communications look solid. But change will be painful, as many of our senior execs have never used Skype or Facetime. The demo event was Microsoft's chance to show true added value. Maybe we should consider full Lync functionality.

So why did Microsoft spend the first two hours highlighting the benefits of its CRM software? More generally, why does Microsoft focus so intently on what it wants rather than what we need? Microsoft finally got around to the UC topics we were interested in hearing about, but not until after it delivered the full CRM pitch.

"Are we switching to Microsoft CRM?" was the first question Vic, our VP of marketing, asked me after the presentation. "It looks very powerful. Will it integrate with our other systems, like our home-grown CRM does? Are we going to retrain the sales organization? Have you budgeted for this, because I have not and that training is going to be expensive."

"No, we're not switching CRM systems!" I repeated numerous times over the next few days. I'm reliving my frustration just thinking about it.

My organization is simply trying to understand our pressing software needs and buy what we need. I dislike bundled channels on my cable TV, and I don't like Enterprise Agreements, either. Call me old school, but I want what I want and I don't want to pay for what I don't want. Neither do our shareholders.

We could be so much further ahead if Microsoft would simplify its licensing terms so that non-PhDs could understand them. And with the productivity savings, we just might have time to evaluate other Microsoft products.

I know what you're thinking: I should be spending my time with our Google Enterprise rep. I assure you, we're taking Google's offerings seriously. But my concerns are similar to those of my peers, as revealed in Art Wittmann's recent InformationWeek research report titled "Google in the Enterprise." Those include shortcomings in the areas of data security, integration with existing infrastructure, and Google's overall enterprise capabilities.

Among the top reasons companies are considering Google: end user demand, cost of purchase, ease of use, application availability, and ease of deployment. "CIO frustration with Microsoft and its licensing schemes" should be on next year's Google in the Enterprise survey.

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lkeyes70
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lkeyes70,
User Rank: Strategist
12/1/2013 | 2:19:41 PM
Whew... glad someone else is saying this.
I've thought Microsoft licensing has been out of control for years. I'm a small business person. Just trying to figure out which copy of *Windows* or *Office* to buy, in their multiple guises is a nightmare.  

For my money, the extra $500-$1000 spent on a Macintosh desktop and attendant OSX, and applications not only simplifies one's life, but gives one BMW-type quality in both the hardware and software. Add the FileMaker database for end-user database connections to back-end databases of all kinds including mySQL, and you have a versatile suite of productivity software which is stable, reliable and oh yes, legally licensed without having to attend three-day courses. 
J_Brandt
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J_Brandt,
User Rank: Ninja
11/29/2013 | 3:06:58 PM
Re: My experience
Microsoft is the only company whose licensing discussions literally give me headaches.  Sadly Rob, I'm not surprised that came out more confused.  I've found there are some third parties that understand the licensing program better than some of the people at MS.
John McGreavy
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John McGreavy,
User Rank: Apprentice
11/26/2013 | 2:27:31 PM
Re: Shameless Plug for Google
We are taking a serious look at Google.  As another reader points out, Google appears to indeed be syphoning off some of the MS business.  I think we can run much of our end user business on Google enterprise apps, but dragging end users through change is not without its cost.
Utsalady
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Utsalady,
User Rank: Apprentice
11/26/2013 | 10:45:08 AM
Why you should NOT attend my Microsoft Licensing Course
I teach three-day courses in Microsoft licensing and negotiations, and one of the first things I tell my classes is "you shouldn't be here." There's no way anyone should need to spend three (it's threatening to go to four) days in a classroom just to figure out how to buy a vendor's products. 

Customers should never confuse their MS rep with an expert in MS licensing. They're trained to sell and they get virtually no training in licensing. I am an expert, but then this is all I do and it is a full-time job to keep up with the rules. For any other company, that's sheer overhead.

I'm also disturbed by Microsoft's complete disinterest (and I'm sure they're not alone) in helping customers out by building some kind of internal license enforcement or even notification into their software. With very few exceptions the software does not stop enterprise users from doing something they aren't licensed to do. That works in MS's favor, of course, keeping customers fearful that somewhere along the lines they overstepped the rules, so they had better toss another million onto the pile to keep the licensing police away. I'd rather see people spend their money in more useful ways, but the truth is that it is trivially easy for a system administrator to do some normal and common IT task that exposes their company to thousands of dollars in compliance penalties.

The idea that customers are supposed to know the rules is absurd, since Microsoft never announces or describes in detail some very significant changes. But understand their culture: this is probably the largest company in the world that does not license any Microsoft software. They do not feel your pain nor do they curse their staff with any requirement to know anything at all about licensing.

Paul DeGroot / Pica Communications
Lorna Garey
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Lorna Garey,
User Rank: Author
11/26/2013 | 8:50:10 AM
Re: Strategy for handling vendors
Exactly - time is our most valuable commodity. If I am on a call or in-person meeting with someone and they veer off track, I don't have a problem saying so, and I appreciate when people do the same for me.  Better than walking away thinking "there's an hour I'll never get back."
FormerMTman
IW Pick
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FormerMTman,
User Rank: Apprentice
11/26/2013 | 8:38:16 AM
Microsoft is Bad, Oracle is worse
Microsoft has basically taken a page from Oracle regarding licensing.  Take Oracle's DB for instance, there are different levels of the db product and their is tiered licenses to support those levels.  Solaris, once free, but charged you for certain updates, is now free for something like 60 days, but you get no access to any updates.  With Oracle's DB products, not even the CPUs are free.  With any Oracle products, access to updates is extremely pricy and based on an annual support contract FOR EACH PRODUCT!  And then you see Larry's $100M World Cup boat and you know where your money went, because it sure wasn't on better support.  At least with Microsoft, Windows and SQL Server updates don't require you to read through literally pages and pages of documents regarding how to install the patch that you so desperately need.  I would bet though that Microsoft is headed directly in Oracle's direction.  It really is no wonder that so many IT pros are looking at Google and open source solutions instead.
SaneIT
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SaneIT,
User Rank: Ninja
11/26/2013 | 8:01:55 AM
Re: It is pretty nuts
This is far more common place than it should be.  As soon as you start talking about licensing the door is open for analyzing every single product you use and trying to negotiate ways to leverage the various plans.  The thing that bothers me most is that Microsoft has taken to quarterly meetings with me to "keep me up to date".  When I need to spend three hours with them every few months to make sure we are using our licensing plan to it's potential and that we aren't missing something there is a problem. 
KevinRCasey
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KevinRCasey,
User Rank: Moderator
11/25/2013 | 10:38:16 PM
Re: It is pretty nuts
A while back I interviewed the SVP of ops at Jordache about their IT overhaul in concert with the brand's modernization. Much of that makeover was tied to moving everything online, and Google was the major piece. The exec contacted Microsoft first, but found pricing problematic: "it was a high level of negotiation."

http://www.informationweek.com/mobile/jordache-redesigns-it-around-cloud-google/d/d-id/1105742

McGreavy rightfully notes that Google's not for every organization and comes with its own considerations and pitfalls. But it sure seems like Google has siphoned off some corporate productivity and collaboration business from Microsoft simply by offering more straightfoward pricing.
John McGreavy
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John McGreavy,
User Rank: Apprentice
11/25/2013 | 9:00:02 PM
Re: Question ...
Lorna, you ask a good question about the runaway Microsoft presentation.   I could have stepped in, but how would that have looked?  I'm the CIO of the company and I arranged for the session.  If I can't control a simple vendor session, what message does that send?  Definitely a judgement call, but effectiveness is a careful balance of executation and perception.  I let the CRM thing run its course, but I was steamed!
BillS20101
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BillS20101,
User Rank: Apprentice
11/25/2013 | 6:07:59 PM
Strategy for handling vendors
A good way to keep vendors on track and to break thru the deliberate obfuscation is to schedule 2 or 3 vendors on the same day.  Make it clear that you are talking to all three.  Makeit clear to the rep and his boss that you only have money to spend on voice and video this year.  Tell the rep they have two hours to address your needs, remind them every half hour how much time they have, and usher them out right on the dot.  If they choose to talk about CRM when you want to hear about integrated voice and video conclude the meeting with "That was very interesting and we're looking forward to hearing what Google has to say about our problems".  

 

Follow that up with a note to the district manager cc'ing the Head of Sales that your rep wasted two hours of your time.   

 

Oh - and keep posting items like this! :)

 
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