Microsoft recently revealed a strategic change to its Enterprise Agreement that will raise the minimum commitment for commercial customers as a way to simplify the purchasing process.

Beginning July 1, 2016, new enterprise enrollments and enterprise subscription enrollments must commit to at least 500 users or devices, up from 250. Customers licensed under an existing Enterprise Agreement can renew the previous terms for up to 36 months before moving to the newer programs.

Government customers — federal, state and local markets — are exempt from the minimum increase. Current Enterprise Agreements for the Government Partner model will remain in place.

Microsoft says the new structure aligns with buying patterns. Organizations with about 500 users cross an inflection point in terms of system complexity. The new standard serves to split customers at that inflection point to simplify the purchasing experience and reduce sales costs.

A Different Route

For customers with fewer than 500 users, Microsoft provides two alternative licensing programs:

  • The Microsoft Products and Services Agreement (MPSA) organizes software and online service licenses together in a simplified agreement. Customers create their own purchasing structure that meets organizational needs while optimizing price through consolidation.
  • Cloud Solution Provider offers customers committed to online services an opportunity to outsource service management. CSP Partners manage billing and support for online services-only customers and can sell their own intellectual property alongside Microsoft products.

MPSA serves as Microsoft’s preferred licensing method for customers with fewer than 500 users. The platform offers one to three-year durations and will soon offer terms as short as one month. There are other benefits for smaller enterprises, as well. For example, Microsoft does not require a minimum when purchasing cloud services, so customers can start as small as they like. Companies can also purchase Microsoft Azure on a pay-as-you-go basis, removing guesswork from licensing purchases. Both can be purchased through MPSA.

This purchasing process removes the longer commitments enterprise licenses typically require. It aligns more closely with how customers purchase other services and scales to a larger pool of customers. It should be noted that these scenarios do require customers to order software as it’s deployed.

Here to Help

Reach out to CDW’s Software Licensing Center for more personalized direction and advice on how to proceed in light of the new changes, or contact a CDW software license expert. We can help IT leaders better understand this evolving area, allowing them to maintain their focus where it should be — on their day-to-day responsibilities.