Category Archives: Asset Management

Good Microsoft Customers Beware

Louis Pellegrino Blog

Louis Pellegrino, Director – 

If you’re a loyal Microsoft Enterprise customer, you’ve likely exercised your option to leverage volume licensing agreements. You’ve diligently taken advantage of new offerings, and your environment is a poster child of Microsoft products.

Be careful.

The trouble is, Microsoft account teams are assigned aggressively high bars to grow revenue. In Microsoft’s view, there’s no such thing as a saturated customer. More specifically, there’s no such thing as a customer who shouldn’t produce more revenue this year than the year before.

If you already have a significant installed base of products, your Microsoft account team will likely focus on selling you myriad high-edition value-added products, or they will pressure you to convert your on-premises workloads to their Cloud Services.  If you dutifully sign on and acquire these upgrades, or if you move hastily to online, there’s a good chance you won’t use many of the features, which means you’ll be buying capability you don’t need.

If, on the other hand, you push back and say your existing product suite is adequate for your needs, you will very likely become targeted for a software audit aimed at identifying unauthorized use of licenses and assets and extracting significant fines and penalties.

While audits of enterprise software customers were traditionally an exception, that has changed, and today all software publishers increasingly rely on audits to fill revenue pipelines depleted by declining sales of new products.  For large and established Microsoft customers, the risk is especially high because, by virtue of their size and scope, they are by definition targeted to produce significant revenue growth.

Customers can regain control of their relationship with Microsoft and other software providers by demonstrating compliance and complete and detailed oversight of their software assets.  Equipped with a detailed inventory of volume licensing agreements, deployment landscape and purchase history, you can respond to an audit with confidence, strengthen your negotiation position and improve your relationship.

Check out a recording of a recent Alsbridge webinar that discussed how customers can respond to Microsoft licensing strategies.

Feeding the Microsoft Money Machine

Louis Pellegrino Blog

Louis Pellegrino, Director – 

If you’re a Microsoft Enterprise Agreement customer these days, you might be feeling like a walking ATM. It seems that the more products and licenses you purchase, the harder the sell becomes to buy even more.

The reality is that Microsoft Enterprise sale teams are assigned aggressive growth targets for increasing account spend year over year. And the bigger the account, the greater the pressure to grow revenue from that customer.

The problem is that the opportunity for organic growth simply isn’t there.  Many large customers – those with 5000 devices or licenses – are already well-stocked with core Microsoft products.  Ironically, however, it’s the customers with a lot of products – who would seem to have the least need for more – are the ones most aggressively targeted to drive additional revenue.

One common tactic employed by Microsoft sales teams is pushing new online services that customers either don’t need, aren’t ready for or already have from other providers.

Another ploy is to use a dizzying mix of licensing metrics, shifting pricing models and executive relationships to fragment and confuse the buyer and convince them they’re getting a great value-proposition – but only if they Act Now.

Customers who push back can expect to be played the compliance card and threatened with software audits or with significant price increases.

In addition to finding themselves under constant siege, many customers ultimately come to realize that they don’t have the time, resources or know-how to leverage any of what was sold to them as a great value proposition.

Bottom line: If you’re a large Microsoft customer, be aware that your wallet is at risk.

I’ll be hosting a webinar on Thursday, April 30th at 11 a.m. to discuss how customers can effectively respond to Microsoft compliance audits and sales strategies, specifically focusing on volume licensing agreements.

Managing Microsoft Licenses: the Cost of Convenience

Louis Microsoft Asset blog graphic

Louis Pellegrino, Director ·

If you have an employer-supplied notebook computer, there’s probably an asset tag on the back that your organization uses to track and manage that device during its useful service life.

That asset tag likely places the cost of the device at less than $1,000.  Meanwhile, the various Microsoft programs running on the same notebook, such as Office, Visio and Project, as well as client access licenses such as Windows Server, Exchange Server, SharePoint Server, SQL Server and Systems Center Server, go largely un-inventoried.

The cost of just a few of these Microsoft licenses can well exceed the value of the notebook or server device itself. However, because they’re not physical “things,” software licenses often don’t get the same level of asset management scrutiny and discipline applied to hardware.

Most mainstream business software is licensed via volume agreements, and Microsoft uses several programs to address small, medium and enterprise class customers.  When installed on either PC or server hardware, the software is activated by an installation key.  Prior to the volume licensing approach, these installation keys were typically unique and acted similarly to the asset tag affixed to a notebook.

Software acquired via volume licensing, meanwhile, offers the ability to reuse a common installation key repeatedly, thus making it difficult for that identifier to serve as an asset tag.  The convenience of a common installation key leads many customers to over-deploy many Microsoft products; without, moreover, any automation in place to track installations and required order placement obligations.

While this dynamic is positioned under the auspices of convenience and simplicity, the dark side is that Microsoft has, like many other software publishers, dramatically stepped up its auditing and compliance efforts. In fact, many sellers are assigned revenue targets specifically tied to extracting remediation dollars from high-volume customers.

The compliance dance begins with a seemingly benign notice from Microsoft to customers who haven’t kept pace with growth expectations. From there the pressure builds to submit to a Software Asset Management (SAM) engagement, which is a degree less onerous than full-scale, official audit.  Ultimately, Microsoft insists on a comprehensive network scan, using either a sanctioned tool licensed by the customer or one that Microsoft brings to the engagement.  In most cases, this network scan reveals installations of products far beyond what the customer has paid licenses for, and starts a difficult negotiation cycle with Microsoft focused on collecting remediation revenue.

Once Microsoft learns that no formal license management solution is in place, the burden shifts to the customer to prove why those licenses are not in service or used for production purposes.  This process can take weeks or months, consuming valuable people cycles.  Ultimately, Microsoft collects significant remediation revenue, even if the negotiated amount might be less than what the original scan indicated was owed.

More importantly, the process gives Microsoft the knowledge that the customer has no license management solution. The result: as when a taxpayer is audited by the IRS, you are placed on an ominous “watch list.”

The customer can turn this entire scenario on its head by demonstrating complete oversight of its license entitlements and deployments.  Many commercial solutions available today are optimized for Microsoft Software License Management.  By providing a robust inventory of volume licensing agreements, deployment landscape and purchase history, along with automated workflows and better controls, these solutions ensure that few to no installations take place in a vacuum.  Moreover, improved oversight reveals countless instances where deployed products are no longer assigned to a device or user and can be returned to available inventory for reallocation to either another device or another user (repurpose vs. repurchase).

An effective licensing management solution can show Microsoft that they have no leverage to arbitrarily squeeze revenue from a customer for mismanaged product deployments.  Once Microsoft becomes aware that a customer has the power of a licensing management platform in place, the leverage for future negotiations fundamentally shifts back to the customer.