Time is right to bargain with Microsoft

I think it’s a wonderful thing that Bill Gates is retiring so that he can devote himself to his foundation. If he puts half the effort into doing good works that he put into building Microsoft, the world will benefit. However, that doesn’t mean your company has to continue funding his efforts by overpaying for Microsoft license agreements.

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A Gartner report issued on June 5, “Five Leverage Points to Use When Negotiating with Microsoft,” focuses on the Microsoft EA (Enterprise Agreement). EA is a subscription model (aka revenue stream) for Microsoft, in which companies sign on for what is usually a three-year period. During that time they receive certain guarantees, but as it turns out, they may be paying for more than they need.

Software Assurance is a big part of an EA. It guarantees that you will always have the latest version of Windows and Office. But the amount of time between versions is growing longer. Consider: The last release of Windows was six years ago. If you have an EA from five years ago and have renewed it twice, you may have paid for that entitlement three times over. Other companies opt for an EA but still upgrade desktops at the department level, which means the company ends up paying a second time for the Windows and Office licenses.

The second EA entitlement is the Core Client Access License. It bundles client access licenses to Windows Server, Exchange Server, SharePoint Server, and System Management Server for a single, low, low price, so to speak. But what if your company uses Lotus Domino? A company that uses fewer than all four Microsoft servers is paying for client access it will never use. If you take the à la carte Select Agreement approach, in which your company owns the software and there is no assurance, you can save a great deal of money.

The third big-ticket item in the EA is Microsoft Office Professional Edition. The difference in price between it and Standard edition is about 25 percent, but the difference in features is negligible.

There are many currents in the industry that can offer ways to reduce the cost of and support for client PCs. Smarter companies are recasting their desktop purchasing strategy by segmenting their users. They know one size does not fit all -- so why pay for it?

There is a shift taking place, away from mammoth applications and the support they require. Our very own Oliver Rist says you’ll need 2GB of RAM to run Windows Vista. But on the horizon are downloadable applications from the likes of Google, not to mention mashups, reusable Web services, and the OpenDocument format.

Plus, the fact that the desktop is no longer the center of the universe means you can now safely consider, where appropriate, Linux desktops. It may not be right for all 50,000 of your desktop users, but maybe there are 25 percent who would do nicely without all the bells and whistles of a Windows desktop.

Finally, other leverage points you can use, according to Gartner, include convincing Microsoft that you can walk away from the deal and use your currently established licensing rights, or that you can upgrade Windows via the hardware refresh, rather than through an EA agreement.

It’s hard to say when exactly the world changed, but certainly everyone can agree that innovation has moved off the desktop. Perhaps it is time to stop paying it tribute.