News

Microsoft Licensing Price Hikes

Enterprises left to determine if discount drops at license renewal for the Platform EA bundle.

• By Kurt Mackie
• 10/03/2012

The next time you renew your Enterprise Agreement with Microsoft, you may want to pay heed to a consulting firm that is once again pointing to possible "stealth" price increases

Organizations may find increased of up to 58 percent by renewal time when licensing the "Platform EA" bundle; the bundle consists of Windows, Microsoft Office Professional Plus, and Client Access Licenses according to an October "formula" analysis by Software Licensing Advisors. The analysis was performed by Paul DeGroot of Pica Communications, a well-known expert on the subject.

Shifting EA Discount?

As with DeGroot's earlier analyses, the analyst warns about EA discounts; this time he has issued a warning about the the Platform EA bundle. The discount at initial signup -- 15 percent when buying the Platform EA licensing -- may change at renewal. According to DeGroot's scenario, the discount drops to just five percent. The discount shift is not disclosed on Microsoft's renewal forms. Organizations must perform backward math calculations, as DeGroot does, to discover the change.

For organizations buying in bulk, this lower discount rate can be substantial -- DeGroot estimates that a 5,000-seat license of Windows desktops over the three-year Software Assurance period amounts would rise by $428,250.

DeGroot outlines his calculations, which Microsoft has contested in the recent past. However, because the discount isn't detailed at the time of contract renewal, customers (or advisors) must perform the calculations to figure it out the changes, if any.

Windows 8 and Hyper-V Costs

Software Licensing Advisors recently addressed the question of Microsoft's coming licensing changes with Windows 8, which haven't yet been fully detailed by Microsoft. Windows 8 will ship with Hyper-V hypervisor on the client side for the first time, use of which could entail additional licensing costs depending on how it is used and the kind of licensing an organization has secured.

Many have assumed that Hyper-V could be used to host an older Windows operating system, which could prove useful in the future for organizations migrating from one Windows operating system to another. However, Microsoft has typically just said that Hyper-V on Windows 8 is there for independent software companies to test software versions or for IT pros to run tests on older Windows versions, rather than to support migration scenarios.

Possibly, Microsoft may only offer Windows 8 for x86/x64 systems as an OEM or system builder release for installation on hardware, rather than as a retail-sold packaged product, according to speculation in a Software Licensing Advisors blog post. If so, the restriction to an OEM-style license would mean that the OS would be tied to the specific hardware. In such cases, using Hyper-V on Windows 8 to run another copy of Windows 8 as a guest operating system may entail added licensing costs. If Windows 7 were the guest OS running on Windows 8, it would have to be the boxed retail version, which can be installed on another machine, rather than the OEM or system builder version.

It's not clear yet what desktop virtualization rights users will have with Windows 8, so the blog post remains speculative until Microsoft releases details. The post suggests that having Software Assurance on Windows 8 or a Virtual Desktop Access license or a Windows Intune subscription may be the only means to properly license virtual machines running on Windows 8.