Effective yesterday, Aug. 1, Microsoft customers have a simpler way to add Microsoft Office 365 to their Enterprise Agreements (EAs). Known as Office 365 Add-ons, the new Office 365 purchase plan will allow new, existing, or renewal EA customers to procure Office 365 as an “add-on” to their existing on-premises Software Assurance (SA) investment.
Why Microsoft Office 365 Add-ons are a breath of fresh air
When Microsoft introduced Office 365 a couple of years ago, the goal was to move organizations to the cloud and transition their on-premises, perpetual license workloads, such as Microsoft Exchange, SharePoint, Lync, and Office ProPlus, to a hosted subscription-based licensing model. But with thousands of customers already under Enterprise Agreements for these traditional licenses with Software Assurance, the process wasn’t going to be easy.
In order to accommodate organizations that wanted to begin transitioning to Office 365 before the term of their Enterprise Agreement ended, Microsoft offered a purchase option that introduced transitional part numbers (SKUs), Client Access License (CAL) Bridges, and pricing changes that would account for the difference in what customers were paying on-premises versus what they would need to pay in the cloud.
Additionally, Microsoft had to update many of its contractual documents, including Enterprise Agreements, to accommodate terms for online services. The new language used to address minimum purchase order requirements, price level minimums, true-up due dates, and other conditions brought about a whole new set of program terms or changes.
The result: the hybrid licensing model that many customers use today. This licensing approach has its benefits. It allows organizations to transition to cloud services at their own pace, matches online services plans to meet requirements of users within the organization, and amasses no incremental costs in a year for equivalent transitioned users. These benefits make the hybrid licensing model optimal for customers looking for a long-term solution.
However, the new SKUs, licensing options, and product/program terms introduced by the transitional hybrid licensing model add a layer of complexity that can become an unforeseen administrative burden for some organizations. Continue Reading…