#Microsoft Price Increases

As of the 1st of December, Microsoft's CAL Differentiation will take effect.  This is essentially an increase in price for USER CALs by 15%.

Affected CALs:

·         Bing Maps Server CAL

·         Core CAL Suite

·         Enterprise CAL Suite

·         Exchange Server Standard and Enterprise CALs

·         Lync Server Standard and Enterprise CALs

·         Project Server CAL

·         SharePoint Server Standard and Enterprise CALs

·         System Center 2012 Client Management Suite

·         System Center Configuration Manager

·         System Center Endpoint Protection

·         Visual Studio TFS CAL

·         Windows Multipoint Server CAL

·         Windows Server CAL

·         Windows Server RDS, RMS, Terminal Services CAL

Overview

The purpose of this document is to provide an overview and list of commonly asked questions regarding the upcoming changes to the device vs. user CAL model and the Enterprise CAL Suite.  These changes have been made to reflect current trends in the marketplace and align to what customers are looking for in Server-CAL licensing. 

Call to Action
User CAL differentiation, the subsequent price change and changes to ECAL Suite can be shared with customers beginning October 1, 2012. Partners can inform customers of these changes to ensure that sales conversations happen with full transparency.  All changes discussed in this document will take effect 12/1/2012.

Talking Points – CAL Differentiation

Microsoft offers both a per user and a per device option when purchasing Client Access Licenses (CALs).  Traditionally the price has been the same regardless of which option customers chose.  Going forward Microsoft will differentiate between these CALs.  As part of this approach we will be raising the price of the user CAL by 15%.  The device CAL price will remain the same (no price increase).  We are making this change in response to the increasing value of user based licensing over the single device licensing model.  There are three primary drivers of increased value for customers in the user CAL.

1.        Increased value in support across devices: Microsoft’s next generation of server products deliver more value for user based licensing. As an example the new version of Office, and the underlying servers that support its functionality, will now work with many more devices.

2.        Increased number of devices:  It is clear there has been an explosion of consumer devices which are proliferating rapidly into business. We believe, on average, there are 3 or more devices per information worker employee in companies today.   With the introduction of Window 8 there will be another boost in business ready, consumer oriented hardware that will continue to fuel this device proliferation trend. The more devices people use, the greater the value of user-based licensing.

3.        Manageability and Compliance:  User CAL licensing also simplifies manageability and compliance.  In the past, IT departments purchased and asset tagged all hardware used by employees. It was easy for IT to count and license the number of devices being used by their company. With the consumerization of IT this trend is changing.   IT no longer has a good sense for how many devices are being used to access company resources and find it easier to count and track the number of employees they have.  In fact many of our customers report that ease of counting users makes user-based licensing much more valuable than device-based licensing. 

FAQ: CAL Differentiation – Inquiries

Q: Why is Microsoft increasing the price of user CALs?
A: Device proliferation has increased the relative value of the user CAL (which supports unlimited devices), and Microsoft is increasing the price by +15% accordingly.

Q: When will my customer see a price increase?                                                                        A: EA customers’ pricing for committed products is fixed for the term of the enrollment so customers will not be affected by the differentiated CAL pricing until their next renewal. Select and Open customers will see the higher price for User CALs for affected products December 1, 2012.

Q: Will the use rights vary for user CALs versus device CALS?

A: No, the differentiated pricing is solely based on the additional value derived from the User CAL. The use rights and inclusions of the CALs remain identical as explained in the Product Use Rights documents available at www.microsoft.com/licensing

Q: Can I share this information with customers?
A: This information can be shared with customers beginning October 1, 2012.  We will not be publicly disclosing the User CAL price change.  Changes will take effect December 1, 2012. 

Q: What are the next steps for partners?
A: Partners should review the changes and understand the reactive talking points that can be used with customers.

Q: Do I need to proactively contact any customers with this information?
A: You may choose to alert customers to the upcoming price increase to secure early commitment to renewals and protect customers from the change. Note that existing requirements and concessions are unchanged with regard to early renewal requests.

Q: Should I encourage customers to purchase user CALs over device CALs?
A: The choice between selecting user CALs vs. device CALs depends on 1. economic factors and 2. ease of management.  If customers have fewer devices than users it may make sense for them to license per device.  If the customer finds it is easier to track devices then count users, the per device licensing model offers an appropriate solution.  If the opposite is true, per user CALs may be a better fit.

Q: How can I help customers make the best decision on User versus Device CALs for a particular environment?                                               

A: A tool will be made available to assist customers in selecting the most appropriate CAL mode for a given environment. The tool requires a number of inputs with regard to users/devices/shared devices/information use to enable customers to review their options and then provides a recommendation. The tool is available in December 2012.

Q: Where can I go for help if I have a question or escalation that I can’t handle?
A: If you need to escalate an issue regarding the new differentiated user CAL, please direct questions to your Partner Account Manager.

Q:  Why a 15% price increase?

A:  Microsoft conducted customer research to understand how much more value customers realized in the user CAL.  We tested various price points and landed on a 15% increase which we felt was fair and in line with Microsoft’s strategy to price product below the absolute dollar value.

Q:  What if my customer cannot absorb a 15% price increase?

A:  The costs of CALs represent only a percentage of the entire agreement. Most customers experience only a moderate increase of 2-3% on the total agreement.

Q:  Will you be raising prices again on user CALs?

A:  Microsoft has recently increased and lowered prices across various products and services (e.g we recently lowered the price of O365 by -20%)  We work hard to align prices with the value we deliver with our engineering investments.  When we increase engineering investments, customer value also increases, and in this may result in increased prices.

FAQ: CAL Differentiation – Customer Inquiries

Q:  What should I do now that the price of the user CAL is increasing 15%?

A:  Customers should evaluate both the user CAL option and device CAL licensing option and select the solution which best fits their needs.  Customers who expect the number of devices to grow over the next 2-3 years may choose to invest in the user CAL.

Q:  Which CAL is right for my business?

A:  For many enterprises where employees far outnumber their devices, there will be no change and these companies will see value as they continue to purchase on a per device basis.   For those enterprises where devices already outnumber employees, per user licensing will likely be a valuable option.  For customers who are near parity in people and devices, we recommend they consider how device trends may affect this balance going forward, and then do a comparison between the two licensing options.

Q:  What resources are available to help me select the solution that is right for my business?

A:  To help all customers who want to compare per device/per user CALs, we have developed a simple online tool for illustrating this comparison (available 12/2012).  In addition, our Licensing Specialists will be able to help work through detailed analysis as needed.

Q:  I currently license CALs per user and I would like to switch.  How do I do this?

A:  Customers with active software assurance can switch between user CALs and device CALs at their contract renewal date.  Customers should work with their account team to make the change.

Q:  I currently license CALs per device and I would like to move to per user.  The per user CAL is more expensive.  Do I need to pay the difference or “step-up” to the new license? 

A:  There is no need to “step-up” from device CAL to user CAL.  Customers can begin paying the new SA price for the per user CAL.

Q:  Now that user CALs are worth more than device CALs, when I switch from user CALs to device CALS is there a ratio that is applied when transitioning?

A:  There is a 1:1 ratio when transitioning from device CAL to User CAL or vice versa.

Q:  I am interested in transitioning from per user CAL to per device CAL.  Do I choose which devices to cover as part of my Enterprise Agreement?

A:  Every qualified device must be licensed when moving from per user CAL to per device CAL

Q:  Will Office Web Apps (included as part of the Office license), be licensed on a per device or per user basis? 

A:  Office client remains licensed per device.  The primary user of a device licensed for Office 2013 will be licensed for access to the Office Web Apps from any device in roaming scenarios. In these situations, the primary user is enabled for remote access through Office Web Apps. 

Q:  What if I want to add more device CALs to my agreement?

A:  Additional device CALs can be added through true-up at your agreement anniversary.

Q:  What if I want to add more user CALs to my agreement?

A:  Additional user CALs can be added through true-up at your agreement anniversary.

Q:  What if I want to make a change from per user to per device CALs mid-agreement?

A:  Unfortunately, customers cannot switch mid-term between per user and per device CALs.   The advantage for customers licensing per user is that they are protected from the price increase for the term of the agreement.

Q:  How many devices can I cover with the user CAL?

A:  The user CAL covers unlimited devices.  Each user CAL must be assigned by named user.

Q:  Can I reassign a user CAL to a different user?

A:  Yes, you can reassign any license in VL once per quarter (90 days).

Q:  Why are you making these changes in December 2012?

A:  We are making these changes to align to our product release cycle.

Q:  Windows server 2012 just launched.  Why did this product launch with one price and now that price is changing only months later?

A:  The decision to differentiate between the user CAL and device CAL was a company-wide initiative and affected multiple products in addition to the new Windows Server product.

Q:  What if my users are on O365.  Do I need to worry about differentiating between per user and per device?

A:  No. O365 is licensed per user.