Strategic CIO // IT Strategy
Commentary
11/25/2013
09:06 AM
John McGreavy
John McGreavy
Commentary
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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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RobPreston
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RobPreston,
User Rank: Author
11/25/2013 | 9:35:53 AM
My experience
I'm not involved in our company's licensing of Microsoft software, but a couple of years ago I spent about an hour in Redmond with the Microsoft executive who heads up its licensing. I just wanted to get a broad understanding, but I came out of that meeting more confused than when I went in.
Laurianne
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Laurianne,
User Rank: Author
11/25/2013 | 9:36:55 AM
MS Licensing: Sounds Like Wireless Carriers
This is an indictment of whoever created the incentive structure for your Microsoft rep. Becuase not only will you not bite with regard to the CRM switch, but you will not spend a cent to send your people to licensing class, is my guess. This reminds me of how the wireless carriers operate: Make contracts so heard to decipher that the average person can't find the best deal. Enterprise is a whole other level of complexity.

When I started reporting about enterprise smartphones, I learned there were consulting companies whose sole purpose was to help enterprise customers revamp their wireless contracts to eliminate wasteful spending. You shouldn't need this type of service to buy from Microsoft.
Lorna Garey
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Lorna Garey,
User Rank: Author
11/25/2013 | 9:38:08 AM
Question ...
Not being snarky, but why didn't you shut down the CRM presentation in its tracks? Politely, but say, look, this is not what we're here for?
Adam Swidler
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Adam Swidler,
User Rank: Apprentice
11/25/2013 | 12:25:28 PM
Shameless Plug for Google
Disclosure - I work for Google

Very entertaining and insightful article. We hear this a lot from Microsoft customers. I encourage you to take a look at Google Apps. We offer a compelling collaboration platform that includes real-time video for $50 per user per year. Straight up and simple. If you are interested, have a look at our services at www.google.com/apps
DanC131
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DanC131,
User Rank: Apprentice
11/25/2013 | 12:25:42 PM
Re: My experience
Perhaps you should consider IBM's Sametime. It is available as both a cloud or onsite implementaion, is open, extensiable and reliable. The latest Video capabilities are top notch and enterprise integration is excellent.  
Somedude8
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Somedude8,
User Rank: Ninja
11/25/2013 | 1:09:55 PM
It is pretty nuts
I made the mistake a little while back of asking "How much will it cost to add another database server?" Long story short, several very sharp folks and myself, half a day later, still could not answer that simple question. Best we came up with was a price range. a rather broad one.
dpadgitt600
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dpadgitt600,
User Rank: Apprentice
11/25/2013 | 2:10:43 PM
Re: It is pretty nuts
We had the same issue but needed to add a large number of databases. We found PostGres performs as well as Microsoft SQL server and is free. Table partitioning and "Enterprise only" feature - is built in to Post Gres for example... 
hgolden913
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hgolden913,
User Rank: Strategist
11/25/2013 | 2:21:03 PM
Dealing with a Monopolist
Microsoft has you over a barrel until you decide to walk away. Google is certainly one option. For servers and various applications using open source is also a better way to go.

If you've really had enough, walk away!
BillS20101
IW Pick
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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! :)

 
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!
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