Microsoft increases options for application bundle licenses

Microsoft's licensing changes are part of its strategy to get large companies to commit to its application stack for the long term.

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Microsoft has released a new Application Platform licensing bundle targeted at upper midmarket and large companies. The new Enrollment for Application Platform -- which is a server bundle deal -- is set to go live in October.

The enrollment option offers either a one-year true up or three-year true up. True-up refers to the requirement to conduct an inventory of the number of servers running Microsoft applications. The Application Platform Agreement bundles various editions of BizTalk, Office SharePoint Server, SQL Server and Visual Studio and also, for the first time, Dynamics CRM. It is available to customers that spend at least $50,000 per year on Microsoft applications and to those that have older SQL Server deployments without Software Assurance.

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It reportedly offers a 40% savings on BizTalk Server Enterprise Edition and SQL Server Enterprise Edition (customers choose between the two), a 15% savings on the BizTalk Standard Edition and SQL Server Standard Edition, a 15% savings on Office SharePoint Server and Visual Studio Professional Edition and a 40% savings on Dynamics CRM and Visual Studio Team System.

Also, for the first time, the new AP enrollment, which was disclosed at Microsoft's Worldwide Partner Conference this month, will be available from Microsoft's licensing advisers and large account resellers.

The existing Application Platform Agreement, which was introduced in 2008, is aimed at the largest volume licensing customers with Enterprise Agreements who negotiate with Microsoft directly. This licensing option – its name will change to the Negotiated APA offering in October -- is available only to those that spend or plan to spend $300,000 on SQL Server licenses over a three-year period. It bundles together all enterprise editions of BizTalk Server, Office SharePoint Server, SQL Server, System Center Server Management Suite Enterprise and Visual Studio Team System.

Licensing experts say these application platform agreements are part of a larger effort by Microsoft to get customers to commit to its application stack for the long term.
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Licensing experts say these application platform agreements are part of a larger effort by Microsoft to get customers to commit to its application stack for the long term. The new Enrollment for AP, for instance, is especially targeted at midmarket and large customers who haven't signed up for Microsoft's Software Assurance maintenance plan.

Years-old Select Agreements allow customers to mix and match Microsoft server applications, but the recently introduced AP bundles include the right combination of applications -- especially the database -- to run the next-generation business data center, licensing experts say.

The Application Platform Agreement, the option available only through Microsoft to the largest customers, smacks of an SAP-Microsoft application stack deal, one expert said.

"It's a secure-the-platform play," said Deborah Newman, director of professional services for PCPC Direct Ltd., which is a close Microsoft partner on data center and clustering. "It bundles together a number of application enablement products, like SQL and SharePoint, with better pricing, and because it is part of an [enrollment agreement] would let the customer do quarterly or annual true ups."

"It's focused on server components, is a good way to control budgets of a fast-growing company and helps drive Microsoft technologies," said Matt Scherocman, director of PCMS IT Advisor Group, in Cincinnati.

"The challenge? It does not include desktop, which can be a critical component. A good example is the integration between Office and SharePoint," he said.

Microsoft declined to be interviewed for this article, but a spokesman released these statements to our questions about the new offering.

Q: How does this compare to the existing APA?

"With the Enrollment for Application Platform, Microsoft will be taking the principles of the existing Application Platform Agreement and making this option available to more customers through standardized SKUs and via our Large Account Resellers and Enterprise Software Advisors. There are minimum quantities required for each product to qualify for the program."

Q: Is the addition of a one-year true up the new thing?

"There will be two options available through the Enrollment for Application Platform—a one-year true up and a three-year true up. The one-year true up works like a typical enrollment application [EA] with no commitment beyond the initial licenses purchased. With the three-year true up, the customer commits to a minimum purchase, but also locks in software license costs with unlimited deployment rights. In addition, this new enrollment will be made available on our partner price list and can be sold through our Large Account Reseller and Enterprise Software Advisor partners, just like the EA desktop platform."

Q: Is it just a name change?

"Enrollment for Application Platform is the name of the license, or how the customer purchases Microsoft Application Platform through the Enterprise Agreement."

Q: The new enrollment adds Dynamics CRM to the platform. That seems to convey that Microsoft is expanding this to a customer tier below the biggest volume licensing customers who may buy APA. Is that correct?

"The Enrollment for Application Platform is designed for customers who have a strategic focus on standardization, particularly on the Application Platform products or a subset of those products. Beyond that, customers who expect rapid deployment of new solutions will be able to take the three-year true up option and lock in their software license costs for three years with unlimited deployment rights for new applications."

Name

Introduced

Availability

Target

Eligibility

Contract

Products Available

Microsoft Application Platform Agreement* Introduced in 2008 Available from Microsoft directly Large commercial and government organizations Customers that spend or plan to spend $300,000 On SQL licenses over a three year period Fixed annual fee for three year term--unlimited deployment rates based on good faith growth estimate Microsoft BizTalk Server, Office SharePoint Server, SQL Server, System Center Server Management Suite Enterprise, Visual Studio Team System
Microsoft Enrollment for Application Platform July 2009, Effective Date: October 2009 Available from Microsoft partners including Enterprise Software Advisors and Large Account Resellers Upper Midmarket and large commercial and government organizations Customers who spend at least $50,000 per year on applications and have older SQL Server deployments (SQL Server 2000 and SQL Server 2005) without Software Assurance One Year True Up and Three Year True Up BizTalk Server, Dynamics CRM, Office SharePoint Server, SQL Server, Visual Studio

*Name changes to Negotiated APA offering

Paula Rooney is a Massachusetts-based freelance writer.

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