When the time comes and organizations are faced with their Microsoft Enterprise Agreement (EA) renewal decision, it’s always a fierce internal debate. The cost of a renewal can be significant and represents a huge chunk of any IT budget. The complexity of Microsoft licensing, not to mention the challenge of negotiating a new agreement, require that you have a clearly defined plan for the future. New implementations of virtualization and cloud computing will reflect the decision to renew or not, and there are many options to consider.

Software Assurance:

Microsoft has been increasing their push on Software Assurance (SA) as a way for them to better predict revenue. It certainly comes with its benefits, which includes upgrade rights, proactive support offerings, and licensing rights. If you plan to virtualize, in many cases SA is a requirement. In order to make an informed decision on whether or not SA is a worthwhile investment, you will need to evaluate which aspects of the SA package you will actually use. If you aren’t going to take advantage of the full offering, it’s probably not worth the extra money. For example, the support offerings are great but if you don’t require support that frequently, if might make more sense to buy one-off support and pay the fees as they come.

Virtualization:

The decision to virtualize or what to virtualize is a question many companies are facing. Whether or not you choose to use a vendor like VMWare or Citrix, your Microsoft licensing requirements will still be the same. You will want to evaluate the different licensing options along with your virtualization plans in order to get the best bang for your buck. Virtualization has caught on so quickly it has left vendors like Microsoft catching up with their licensing terms. Consequently, we would recommend getting outside help to be sure you are in compliance. The implementation of virtual desktops can be daunting enough - don’t make the mistake of not licensing properly and find yourself facing fees from your vendors.

Cloud Computing:

More companies are looking to the clouds to for alternatives from their current vendors, such as Google and IBM. Taking IT functions in-house and using a cloud-based program to manage these processes are appealing to those looking to cut costs. Data storage, for example, is much less costly in the clouds, and can be a much better option for organizations where storage needs change frequently. Before committing to one vendor, look at all the options. Evaluate what functions would be better managed in-house and the compare costs.

All in all, the question or whether or not you should renew isn’t so cut and dry. Every scenario for your company from now through the length of the contract needs to be considered to prepare yourself for changes you may face, and any new technology you may deploy. The negotiation process will be much more effective if you have a clear-cut plan ahead of time and are prepared to get the best deal to fit your needs. The worst thing that can happen is that you negotiate a complete renewal, leaving you with unused licenses or even requiring you to make another big purchase.

Most companies across the globe are suffering during the financial crisis, grasping on to their customers for dear life. With revenues down and companies holding onto any reserve finances they have, Microsoft has implemented a discount program for its larger customers - offering a 25 percent discount on its Enterprise Agreement (EA) volume licensing contracts. If you are an EA customer, you have until July 3^rd to claim the discount on licensing and software assurance. Products affected are as follows: Windows Exchange Server Enterprise, Office Communication Server Enterprise, Windows Server Enterprise and Sever Management Suite Enterprise (SMSE). In addition to the 25% discount, EA customers are also eligible for a 15% discount on licenses and software assurance for the following products: Exchange Server Standard, Office Communication Server Standard, SQL Server Standard, Office SharePoint Server, Visual Studio Team Suite, Office Project Standard, Office Project Professional, Office Visio Standard and Office Visio Professional.

In another move to gain market share in this economy, Microsoft has also released a set of eight extensions to its Dynamics CRM software that are free for download. The Dynamics CRM Accelerators have been released under a Microsoft open-source license and cover analytics, notifications, enterprise search and event management. There is also a current promotion for existing and prospective customers of Dynamics CRM that offers Convergence 2009 attendees as many as 20 users at US$9.99 per user per month for six months. Microsoft also announced that CRM Online will have a 99.9 percent service-level agreement that gives customers a month’s credit in the event of any unplanned outages.

Software asset management involves staying on top of compliance. SOX compels CEOs and CFOs to attest to reporting clean financials and reporting material changes regularly. Here’s the gotcha moment: SOX also requires them to be compliant with copyright law, which is what gives teeth to vendor audits by the likes of Oracle, Microsoft, Adobe and many of our beloved enterprise software vendors. So in the spirit of CYA, ensure that you have what you need to be compliant.

All leading software companies, with Adobe being the most aggressive, will eventually come around to do an audit. The chance of not being audited would equate to the chance of it not raining at all during the year. Software is intellectual property that should be and will be guarded jealously by vendors. When they asked Willie Sutton why he robbed banks, he replied simply “because that’s where the money is”. Auditing pays and as much as companies gripe about it, they understand that it is a license to borrow and not a license to own the software or service.

All too often, mid-level decision makers feel they’re protecting their enterprise by not owning up to a potential compliance problem when in fact they should be “kicking it upstairs” and making it the C-level’s problem. To use another favorite adage of mine, they need to help their boss’s avoid the “you can’t manage what you don’t know” syndrome. And it goes almost without saying: it’s good CYA.

Non-public companies don’t face SOX, but with increased accounting standards and ever-tightening money lending covenants, compliance is becoming part of that, too. When you apply for a mortgage, you’re asked for your liabilities, including whether there’s a legal action filed against you.  Lenders want to know about your exposure, and compliance shortfalls are an exposure.

Software asset management is our business and every company should make it theirs.

I’m going to be in Waltham, MA on March 19 speaking alongside Judith Hurwitz of Hurwitz & Associates and Phil Philbin of VMware at the IT Economic Stimulus Plan: Optimized SAM and Smart License Management event (hosted by our alliance partner, ManageSoft ).

Click here for event details including RSVP.