Trim Some Microsoft from Next Year's Budget

About this research note: Operate & Optimize notes provide Trim Some Microsoft recommendations for effective and efficient IT practices that help from Next Year's Budget improve the performance or reduce Publish Date: December 10, 2008 the cost of technologies already deployed in the enterprise. Current economic conditions are requiring many IT departments to trim their budgets. Take a closer look at Microsoft licensing agreements to eliminate any excess spend on Microsoft products next year. © 1998-2008 Info-Tech Research Group www.infotech.com
Executive Summary This note provides essential guidance on how an organization can minimize, or even eliminate, next year's budget spend on Microsoft licensing by looking at three main areas: » Centralizing licensing purchasing. » Assessing licensing reassignment possibilities, including the impact of new virtualization rules.
» Reevaluating the need for Software Assurance (SA). One of the biggest challenges many organizations face with Microsoft licensing is limited understanding of their alternatives. This note will help IT managers effectively examine the above three areas to optimize their license portfolios and meet required IT cost reductions by trimming some Microsoft from next year's budget.
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Optimization Point Cost reduction strategies are top of mind for many organizations that are currently facing tough economic times. Many CIOs are looking closely at their IT budgets to identify areas in which to reduce spend while trying to salvage as many staff as possible. Info-Tech's recent Impact Research report, "Opportunities & Challenges in IT Cost Reduction," found that vendor management is the most successful IT cost reduction area, where organizations experience the fewest negative effects on morale, IT operations, and the business, while achieving anticipated reductions.
For many organizations, a large chunk of the overall spend on software licensing goes to Microsoft due to a heavy investment in Microsoft Licensing Microsoft's desktop and server products. Although this can represent a hefty annual cost for many, Microsoft licensing is For more information on Microsoft often poorly understood and sub-optimized. The majority of licensing programs, refer to the companies are not realizing maximum value from Microsoft following ITA Premium research licensing programs because they are: notes: » Making license purchases on an ad-hoc basis. » "Microsoft Licensing Basics: » Paying for licenses that go unused. What You Need to Know" » Renewing Software Assurance (SA) coverage and not » "Understand Microsoft Server fully utilizing the benefits. Licensing" » "Which Microsoft Volume Licensing Program Is Right for Key Considerations You?"
Centralize Licensing Purchasing Organizations fail to realize optimal savings from Microsoft licensing agreements when purchases are made on an ad-hoc basis or when larger entities have separate agreements. These situations can be improved when licensing purchasing is centralized. Organizations that manage their license agreements reap increased contract negotiating power with vendors. A Vendor Management Office (VMO) can help provide the structure to take costs out on a continuous basis while preventing unnecessary work duplication across IT's range of vendor relationships. For more information, refer to the Info-Tech Advisor research note, "Continuous Vendor Management: Establish a Central Point of Contact."
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Microsoft's newly released Select Plus Volume Licensing Program has streamlined this process for larger entities looking to increase their discounts with its licensing. This new program offers more flexibility for mid-sized and large organizations (over 250 users) that want to acquire software licenses and services at any business unit or department level; the different segments effectively act as one organization and take advantage of larger discounts. Features such as a single customer ID and an agreement that never expires make this program attractive for current Select clients. The impact this conversion can have on licensing spend can be very significant, up to more than 20% less than wh... [download for more]