Microsoft Modern Commerce and how this affects our customers

Microsoft licensing has always been a dark art with multiple agreement types, product use rights and portals. Microsoft Partners like Ultima pride themselves on keeping up to date with the constant changes and being able to provide our customers with the right guidance when it comes to translating what is needed for customers' environments.

You may have heard of the new Microsoft Modern Commerce strategy, which is underpinned by the Microsoft Customer Agreement. I am going to explain what this is and how it will evolve into a simpler Microsoft licensing structure for all to understand and manoeuvre.

Why the change?

The number of programmes available to purchase is a minefield with Web Direct, Enterprise Agreements, Server Cloud Enrollments, Open Business, Open Value (OV), Open Value Subscription (OVS), Service Partner Licensing Agreement (SPLA), Cloud Solution Provider (CSP), Microsoft Service & Product Agreement (MSPA) and that's without even mentioning public sector agreements and frameworks.

On top of this, we come to the issue of portals. Not only do customers have multiple portals to manage and understand, but we have the same, if not more as we assist customers with the end user side too! Depending on how your business needs licencing, a customer could have more than one programme which then leads to multiple portals that do not link together with multiple username and passwords to remember and the biggest magic trick is which one is for which.

Each programme comes a different set of terms and conditions for customers to review and accept. As well as T&Cs, product use rights can differ from one programme to another. A good example of this is Windows 10 Operating System which has different product rules under Enterprise Agreement than on CSP.

Moving from one programme to another is not always feasible with products not supported on other platforms and forms need to be completed which can take weeks to transition.

With all this in mind, Microsoft have come up with a strategy to simplify everything I have mentioned above. This will not change overnight, but over the next 2-3 years you will see programmes being discontinued, portals retired and a more unified approach to how you purchase Microsoft licensing and the flexibility to change if needed. This all starts with the introduction of the Microsoft Customer Agreement.

What is the Microsoft Customer Agreement?

Due to various differences between programmes, Microsoft have produced a new set of terms and conditions for each programme, as they could differ from one another. Some of these T&Cs- specifically on the Enterprise agreement side, are very lengthy and then duplicated if another programme is needed.

Going forward, the Microsoft Customer Agreement will be the base Terms and Conditions underpinning all the new motions I will discuss shortly. They are evergreen and if an amendment or concession is required- such as Public Sector eligibility, this will be added as an addendum within the customer's portal to electronically sign.

This change is going to start under CSP as of 1^st October 2019, replacing the previous Microsoft Cloud Agreement that customers would have accepted to be on the programme. As you would have heard, Ultima has released a new CSP Platform and we are in the process of transitioning customers over to this. Under the new Ultima CSP Terms and Conditions, we have already included this new Microsoft Customer Agreement for your approval. To review this separately please click here.

We will see these T&Cs follow into other programmes starting with the introduction to the new Field-Led agreement for Azure that is now available.

The new Modern Commerce Strategy includes 3 Go-To-Market programmes:

1. Partner-Led – this is the CSP agreement that allows customers to interact with Partners such as Ultima for end to end solutions and support. Ultima will be able to assist with all licensing, support and billing, while adding value added services and support based on the customer's needs and in-house capabilities.
   
   
2. Self-Service – this motion is your typical web direct, going straight to Microsoft.com and purchasing licensing or Azure with no support from either Microsoft or Partners
   
   
3. Field-Led – this will be the replacement motion for Enterprise Agreements in the long run. Customers will still interact with Microsoft and an Account Team (depending on the Microsoft Managed Customer List) as well as billing direct from Microsoft. Partners will still be a massive part of Field-Led with value added services and support as we already see with our Enterprise Agreement customers.

The biggest change we will see is that all 3 of these motions will be linked, enabling the customer to choose which model works best for their company and not based on pricing or product use rights. An example of this could be if the customer has a requirement for Office 365 but has all the in-house capabilities to support this and wants to continue being billed by Microsoft and only needs ad-hoc project work from a partner, then Field-Led might be the right motion for them. Though the same customer could be building out a solution within Azure, needing much more support and direction and this could fall under CSP where Ultima can be more integral in the design and support.

As mentioned all 3 motions will be underpinned by the Microsoft Customer Agreement and then just the additional terms added if required, such as Ultima’s Terms and Conditions for CSP.

With the future only having 3 programmes, this will mean less portals and complexity for customers and partners alike.

When do these changes start?

CSP will see massive improvements around Azure as of the 1^st October with the release of a new Azure subscription that is in line with Enterprise Agreement and Web direct from a functionality and portal standpoint. Legacy CSP Azure customers will be able to transfer to this new agreement with a simple click of a button by Ultima. Two big things that change with this new subscription include:

1. Portals used – currently for Azure under CSP, customers use a special portal that is only for CSP customers. For any customers that have moved from EA to CSP they will see a change in the functionality provided and third party/vendor offerings available within the marketplace reduced. With this new subscription all customers will be on the same platform and portal with the same resources available and all the technical add ins that previously only EA customers had access to, such as Costing Management and Resource tagging will be available to all.
   
   
2. Costing Model – currently CSP is billed to Partners in their currency on a monthly basis based off a Microsoft Inter-company exchange rate that is set at the start of the financial year. As you can imagine, this will be high to protect Microsoft against any changes in the financial climate throughout the year. Other agreements such as EA and Web Direct do not follow this same model but in fact the exchange rate is based on a monthly FX Rate that is industry set. The new Azure subscription will work in the same way, this will align all the programmes and mean the customer will get the best price and where there are any dips in the financial climate, Microsoft Reserved Instances will play a big part in protecting investments in the cloud. Big price increases we have seen over the last couple of years have been linked to these pricing models not being aligned, which will not be the case going forward.

With regards to Enterprise Agreements and Server Cloud Enrollments, Microsoft announced earlier in the year that they would be removing Azure for renewals and new customers from the legacy EA models and moving them to a new Field-Led Agreement as of 1^st October 2019. This agreement will be very similar to CSP but directly from Microsoft and without the extra Partner support. Customers can pay for consumption on a monthly basis, similar to CSP including options of reserved instances and I believe an optional monetary commitment is going to be introduced to both Field-Led and CSP in the upcoming months.

If you are in doubt when it comes to which motion is right for your business for your Azure consumption, please speak to Ultima today. There are options available to you as a customer including extended terms, potential EA Renewal, CSP and this new Field-Led Agreement.

Take our Azure Analysis Report

Ultima are offering a free Azure analysis report that will outline all of your current usage and needs, and our licensing specialists will be able to explain what programme options you have available.

As you can understand with this being a brand-new motion, it is not going to be 100% from day one. There are limitations on what can be migrated to CSP, for example legacy Classic resources will not be able to move, but will be supported under Field-Led. The customer choice switch I mentioned earlier in this article will not be ready until Q1 of next calendar year.

With this report Ultima will be able to give you the best guidance on how to proceed and if there is any risk, downtime or modernisation needed with the upcoming Microsoft changes.

Email cloud@ultima.com or call your Licensing team today on 0333 015 8900.

Join our Autonomous Cloud webinar- 1st October

Join our webinar on Tuesday 1st October to hear more about our Autonomous Cloud Platform from Matt Hudson, Head of Data Centre and Cloud.