In a previous job as senior VP of IT and VP of software development at Universal Technical Institute between 2007 and 2011, Annis was involved with the school's Microsoft Volume Licensing agreement for its about 2,200 users and found it "very confusing."
"Some licenses were covered under it and others weren't," he said. "It was confusing to know what you needed to buy and what was covered by the maintenance agreement."
Things got so complicated that he decided to hire a financial accountant to keep track of all Microsoft IT licensing and purchasing, so that the company could do accurate and proper budgeting and future forecasting for Microsoft software.
His current employer is pretty much standardized on Microsoft at the desktop, server and application development levels. Because the company has about 60 end users, Annis doesn't see the benefit of signing up for Volume Licensing, so he licenses the products individually.
This perspective further highlights for Annis how fragmented and inconsistent the licensing terms are among different Microsoft products. "It would be very helpful if they simplified the entire process," said Annis, who has been with his current employer since December 2011.
Xtrii's Johnson has faced similar difficulties and frustrations with Microsoft licensing during his 25 years in enterprise IT, holding CIO, CTO and other high-level executive positions. "I've seen Microsoft licensing in different scenarios and from different perspectives," he said. "It is rare to find someone other than a Microsoft Licensing Specialist who can read a Microsoft Enterprise Agreement, clearly understand it and tell you what it really means."
That includes Microsoft account managers, said Johnson. Account managers often defer these explanations to Microsoft licensing specialists "who speak their own lingo that only Microsoft people can understand"
During his tenure as CIO of an energy company in Austin, Texas, between October 2012 and December of last year, Johnson seriously contemplated upgrading a set of Microsoft on-premises servers, including SharePoint, Lync and Exchange, and moving about 1,200 users to the newer, cloud-hosted versions in Office 365.
But after three months of research, proposals and evaluations involving Microsoft and some reseller partners, Johnson and his team didn't feel they were presented with a clear and favorable licensing and technology plan that would have let his company achieve the goals of the upgrade. They decided to not move ahead.
"We wanted to streamline our IT operations, improve performance and lower our costs, and unfortunately Microsoft and their assigned Microsoft partners weren't clear on how their offering would achieve that goal. So we did not move forward with Office 365, and instead decided to fine-tune what we had," he said.
Microsoft has to make its licensing truly simple and straightforward, "without asterisks," in the way Google licenses its Apps suite, Johnson said.
His advice to CIOs is to not tolerate complexity. "Don't sign the licensing agreement if you don't thoroughly understand it and aren't convinced that it is the best solution."
Get help from experienced, unbiased consultants, listen to advice from peers and start the process early if you're facing the renewal of an existing agreement, he said. "If you're under the gun in terms of time, you're at a disadvantage."
Why is Microsoft licensing so complex?
There are a number of reasons why understanding Microsoft licensing is difficult.
For starters, the company has a lot of products for businesses, including operating systems for smartphones, tablets, PCs and servers; productivity, CRM (customer relationship management) and collaboration applications and servers; databases, systems management tools and application development suites.