- In most cases, the SCE discounts are lower. Under EAP, customers received a 40 percent discount off L+SA. Under ECI, the discount was 20 percent. Under SCE, the discount drops to 15 percent.
For SA renewals, SCE offers a 5 percent discount. This is actually a welcome change for EAP customers who received no discount for SA. But it's a drastic decrease for ECI customers who previously received a 20 percent discount for SA renewals.
- Minimum commitments are higher. Under ECI, enterprises had a minimum commitment of 25 licenses. The SCE program, on the other hand, requires all Windows Servers in the customer's environment be covered.
Customers can no longer pick and choose which servers to add to the agreement. "The minimum commitments are higher, which is probably the one people aren't going to catch onto, at least initially, Muscarella says. "It used to be you didn't have to license all your Windows Servers. Now they require you to license your entire footprint. It could be quite a bit more. If you're in an environment where you were only licensing a small number of your Windows Servers, this could be a big issue for you."
- The negative cost impacts of SCE are in addition to Microsoft's recent price increases. NPI says customers may feel that SCE is adding insult to injury based on price hikes to a number of offerings: Pricing for Windows Server 2012 R2 Datacenter Edition is up 28 percent; SQL Server Client Access License (CAL) pricing is up about 25 percent; SharePoint Server costs have increased by 38 percent.
- The costs built into SCE mean Azure isn't as cheap as it appears. "Don't be fooled by the lure of Azure," NPI says. Under SCE, you'll get access to Azure at the best available pricing and management of Windows Azure will be included for certain Core Infrastructure (CIS) commitments. Instead of paying directly for Azure, NPI says, customers will instead by paying indirectly through the lower discounts offered by SCE.
"By all accounts, Microsoft appears to be just shy of giving Azure away to customers," NPI says. "It's a familiar tactic from Microsoft's go-to-market playbook. Give the product away (or charge very little), embed it into the enterprise, capture market share and raise prices. The rise of SharePoint can be attributed to this strategy."
"Depending on your mix of Microsoft products, the impact of SCE replacing EAP and ECI could increase your costs 20 percent to 40 percent," Muscarella says. "Until you go through and look at your existing environment and counts, it's hard to understand how these price increases could impact you."
For its part, Microsoft says that customers that want to only partially cover their environments with CIS can easily do so through other volume licensing programs that have no dedicated contracts or unit minimums.
"EAP customers can continue their installed base-wide commitment to SQL Server, Visual Studio, BizTalk Server and SharePoint Server in the SCE," Microsoft says. "Customers will see some small pricing changes as we standardize and simplify discounts. Among these changes are a new five percent discount on Software Assurance, a slightly higher discount vs. EAP standard products and a slightly lower discount vs. EAP premium products. Unlike EAP, which provided discounts on only the license portion of L+SA SKUs, SCE provides a full 15 percent discount on the complete L+SA SKUs for key components."
Additionally, new subscription options replace the concept of "deferred licenses," which Microsoft says means that old units can now be covered with subscription or added as new L+SA at signing. The subscription allows customers to flexibly retire those deployments annually as they consolidate workloads or move them to the cloud.
Thor Olavsrud covers IT Security, Big Data, Open Source, Microsoft Tools and Servers for CIO.com. Follow Thor on Twitter @ThorOlavsrud. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.