Info-Tech Research Group1 1 Info-Tech Research Group, Inc. is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns. © Info-Tech Research Group Inc. Transition Licensing to the Microsoft Cloud The cloud is coming – be prepared with a proactive strategy.

Info-Tech Research Group2 2 Hyped up and hailed as a revolutionary technology, the cloud is changing the way businesses work. Microsoft has made a strong push to move all its customers to the cloud. If your reseller or your executive team hasn’t already suggested a cloud transition, they will soon. But that doesn’t mean it’s a good fit. Moving to the cloud might not make sense functionally or financially for your organization. Before your leadership starts asking about the cloud, understand whether it’s a viable option. Examine your IT strategy and document whether or not the cloud works for your business goals and is financially feasible. It’s time to take a careful look at your current licensing position and your organization’s needs – does the cloud make sense? Get ready to justify and defend your position either way. Scott Bickley Senior Director, Vendor Practice Vendor and Custom Research Info-Tech Research Group Like it or not, Microsoft’s cloud is on its way. ANALYST PERSPECTIVE

Info-Tech Research Group3 3 This Research is Designed For:This Research Will Help You: This Research Will Assist:This Research Will Help You: This Research Is Designed For:This Research Will Help You: This Research Will Also Assist:This Research Will Help Them: Our understanding of the problem ✓ Organizations examining a move to the cloud ✓ IT managers scoping their Microsoft licensing requirements ✓ CIOs and IT directors negotiating licensing agreements and looking to save money ✓ IT and business leaders seeking to better understand Microsoft licensing and evaluate cloud options ✓ Understand Microsoft’s cloud offerings ✓ Evaluate if transitioning to a Microsoft cloud product is viable and beneficial ✓ CFOs and the finance department ✓ Vendor management ✓ Software asset managers ✓ Align Microsoft licensing to business goals ✓ Optimize spend ✓ Maintain licensing compliance

Info-Tech Research Group4 4 Resolution Situation Complication Info-Tech Insight Executive summary Work styles are changing: the cloud enables the workforce to collaborate with ease, from anywhere at anytime. There is a big push from Microsoft to move as many of its clients as possible to the cloud. Their resellers have big incentives to sell cloud products. Despite obvious benefits, there are many reasons why the cloud may not be a good choice for your organization at this point. There are many different ways to license, purchase, and deploy the cloud products, making it challenging to know how to maximize your organization’s benefits. Make sure you understand what your organization needs and why, before you commit to moving to the cloud. Complete cost calculations carefully as the cloud might end up costing significantly more. It could also end up costing around the same amount, making it an efficient option. If there are significant barriers to cloud adoption, discuss and document them. You’ll need this documentation in three years when it’s time to renew your agreement. 1.Discuss and document your position. Document your position on the cloud – whether that means transitioning or not, make sure you can justify your position to your organization. 2.There’s no turning back. Once you’ve committed to the cloud, it’s difficult to go back to on-premise licensing. Be certain the cloud is a good fit before executing. 3.If the cloud doesn’t fit, it’s time to start making room. Most organizations are still at a stage where they can keep their on-premise licensing. But this will likely change over the next couple of years – the cloud is imminent, if not inevitable. If the cloud doesn’t make sense now, start thinking about how you might make it work in the future.

Info-Tech Research Group5 5 When the cloud makes sense British Airways British Airways employs a large workforce that works primarily outside the office. They comprise over 41,000 employees, in more than 75 countries, serving 37.5 million customers annually. O365 and Yammer Adoption Staff who did not work in front of PCs needed a way to communicate, collaborate, and access data on the go. Top down communications were an issue: since many staff do not work in front of PCs with their own , corporate announcements were sent through several different communication channels, including the postal service. They also used four different clients that made sharing calendars very difficult. The airline started with a small group of early adopters and then expanded to the rest of the company. Results The adoption provided a whole new set of tools to deskless workers. Yammer allowed employees to communicate quickly, an especially important need when faced with customer service issues. O365 has synchronized their communication, helping them better achieve their business goals. CASE STUDY Industry Source Airline Microsoft “We heard repeatedly that they were more productive at home with their own devices than they were at work. Mobility and flexibility; anywhere, anytime access to data; real-time communications; sharing and storing files in a secure manner online—all these capabilities pointed us to Microsoft Office 365.”

Info-Tech Research Group6 6 Use these icons to help direct you as you navigate this research This icon denotes a slide where a supporting Info-Tech tool or template will help you perform the activity or step associated with the slide. Refer to the supporting tool or template to get the best results and proceed to the next step of the project. This icon denotes a slide with an associated activity. The activity can be performed either as part of your project or with the support of Info-Tech team members, who will come onsite to facilitate a workshop for your organization. Use these icons to help guide you through each step of the blueprint and direct you to content related to the recommended activities.

Info-Tech Research Group7 7 Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Diagnostics and consistent frameworks used throughout all four options Info-Tech offers various levels of support to best suit your needs

Info-Tech Research Group8 8 Best-Practice Toolkit 1.1 Gather licensing documentation 1.2 Build an effective license position (ELP) 1.3 Incorporate licensing shortfalls into cloud transition plan 2.1 Determine functionality requirements 2.2 Evaluate licensing options 2.3 Choose your licenses 3.1 Licensing negotiation due diligence 3.2 Choose your licensing negotiation strategy Guided Implementations Gather documentation Build an ELP Incorporate licensing shortfalls into cloud transition plan Sort licensing groups by functional need Model your licensing costs Assess and plan your transition Negotiation due diligence Leverage your unique position Onsite Workshop Module 1: Document your ELP Module 2: Match offerings to needs Module 3: Negotiate effectively Phase 1 Outcome: ELP Purchasing reference guide Phase 2 Outcome: Licensing needs documented Licensing options assessed Phase 3 Outcome: Negotiation strategy 1. Review and Document Current License Usage 2. Map Microsoft’s Cloud Offerings to Needs 3. Negotiate Your Cloud Transition Transition Microsoft Cloud Licensing – project overview

Info-Tech Research Group9 9 Workshop overview Contact your account representative or for more Workshop Day 1Workshop Day 2Workshop Day 3Workshop Day 4Workshop Day 5 Assemble and Review Documentation 1.1 Send workshop agenda to all workshop participants. 1.2 Obtain and review Microsoft ELP. 1.3 Identify Microsoft cloud options that align with ELP and desired future state goals. Identify and Review Current State vs. Future State 2.1 Cloud transition framework overview. 2.2 Align technology and business goals to workshop; review business feedback. 2.3 Map future state license options for cloud products. Analyze Gaps and Plan Cloud Licenses 3.1 Identify gaps between on-premise current state with cloud/hybrid future state. 3.2 Identify product license changes, requirements, and license rules. 3.3 Model high level cost impact. Develop Cloud Transition Strategy Options 4.1 Document licensing migration paths for cloud/hybrid future state. 4.2 Discuss migration options, costs, and overall license strategy. 4.3 Develop cloud migration product list and action items. Present Cloud Transition Options and Costs 5.1 Prepare final deliverables. 5.2 Finalize viable migration options and costs. 1.Effective Licensing Position (ELP) 2.Microsoft Cloud Products Cost Modeler 1.Cloud Decision Flowchart 1.Pricing Estimator 2.Gap Analysis Assessment 1.Negotiation Decision Flowchart 1.Final Report & Strategy Document Activities Deliverables

Info-Tech Research Group10Info-Tech Research Group10 Last year Microsoft's commercial cloud revenue grew Microsoft’s cloud first, mobile first strategy is paying off and is now on an annualized revenue run rate of $9.4 billion 114% driven by Office 365, Azure, and Dynamic CRM Online Commercial cloud growth of 70% Azure cloud growth of 140% Cloud customer base has doubled over the past 12 months Source: Taft, Darryl K. “Microsoft Continues to See Impact of Transition to Cloud.” eWeek.Microsoft Continues to See Impact of Transition to Cloud

Info-Tech Research Group11Info-Tech Research Group11 Users work anywhere, anytime, on any device. We work with more people on a day-to- day basis today than ever before. – Richard Harbridge, SharePoint specialist The number of very small companies using a paid cloud solution will potentially triple in the next 3 years. – Microsoft The world has become more interconnected, more mobile, more innovative and more complex. [We want to empower] employees to contribute and collaborate whether they’re behind their desks, in a conference room, on a plane, at a hotel, or home. That flexibility allows people to do their best, achieve their highest potential, and be part of a team. – Blair Christie, former Senior Vice President and Chief Marketing Officer at Cisco Transition to the cloud is inevitable, if not imminent Info-Tech Insight Your investment in Microsoft cloud licensing will increase in the next three years. Microsoft wants its cloud products to become the default option. New products are being developed in the cloud and translated to on-premise versions, leading to some features being lost in translation.

Info-Tech Research Group12Info-Tech Research Group12 Believe the hype – there are definite benefits to the cloud The extent of cloud benefits depends on your organization. Fifty-six percent of enterprises consider cloud to be a strategic differentiator, and approximately 58 percent of enterprises spend more than 10 percent of their annual budgets on cloud services. - ICD Reduced or eliminated infrastructure costs Excellent cloud security Increased agility User-based licensing Enabled collaboration 15 devices per user True-up or down once a year Automatic upgrades 99.9 % uptime Potential benefits

Info-Tech Research Group13Info-Tech Research Group13 Understand and document why a move to the cloud makes sense for your organization Build a case for not moving to the cloud. Do your due diligence and make sure you – and your organization – understand the whys or why nots involving the cloud. Microsoft is pushing partners to move to the cloud – don’t cave under pressure. Make an educated choice that fits what your organization needs. Make sure you don’t have any conflicts with data residency due to laws and regulations. Document and defend your needs to prove your position to the business. Assess time and cost of data migration to the cloud. Leaving the cloud is difficult; do not take the commitment lightly. Look into cloud security and licensing, functionality. Remember to follow up. There are always going to be changes. No matter your position, it’s important to start thinking about the cloud. It’s technology that is going to become a vital part of the way businesses work. Make a strategy that effectively justifies or dismisses cloud adoption.

Info-Tech Research Group14Info-Tech Research Group14 Be aware of individual business needs before embracing the cloud If any of these concerns apply, the cloud might not be the best fit: …the single biggest obstacle to cloud adoption in general continues to be the fear of security breaches, closely followed by issues with data sovereignty. - Capgemini Consulting Fears about security Cost Annual payments Legacy systems Lack of agility Data sovereignty Adaptability to frequent change Potential concerns Performance

Info-Tech Research Group15Info-Tech Research Group15 Embark on a thorough investigation to determine if staying with on-premise licensing makes sense A significant investment in Exchange, Skype for Business, SharePoint, and Office – even more so if you don’t have Software Assurance (SA). The cost of recently purchased infrastructure or licensing that could go unused may delay the move to O365. Having not paid SA will lead to a large spike in costs. If SharePoint and Skype for Business are two of the greatest value creators. If Exchange is the only software that will be utilized, choose an Exchange Online Plan instead. Your organization owns equivalent on- premise solutions for the other O365 services. Many organizations are already meeting their collaboration needs with services like calendaring, task lists, and . There are many good reasons to stay with on-premise licensing: Data needs to be stored onsite. Whether for regulatory purposes or organizational preference – either is a significant blocker to cloud adoption. Insufficient bandwidth. This especially may be an issue if your organization operates in rural areas or specific geographic locations. Recent and substantial investments in infrastructure. Moving to the cloud will significantly decrease – if not completely eliminate – your ROI.

Info-Tech Research Group16Info-Tech Research Group16 Read Microsoft’s declarations about the cloud carefully Microsoft purposely skews cloud statistics to drive adoption. Microsoft enterprise customers has Office Microsoft There’s a rush at every major tech vendor to sign up customers for their own cloud offerings before their competitors nab them. They are trying to nab their share of a market that will grow — conservatively — from $56.6 billion in 2014 to more than $127 billion in 2018, according to market research. - ICD 1 in 4 80% of the Fortune 500 are on the Microsoft Cloud - Microsoft

Info-Tech Research Group17Info-Tech Research Group17 Info-Tech’s Microsoft licensing advisory service will help you review licensing from on- premise product pools to cloud-based options, examining the potential for cost savings and obtaining an unbiased third-party perspective. Aspects Examined Product Selection Comparing a complex product cloud offering against new online service terms to determine the best type and quantity of licenses. Business Case Validation Comparing needs against proposed business case and software feature sets to validate solution design to meet needs without over-purchasing. Online Terms of Service Comparing requirements against proposed service plans and details to identify gaps and suggest opportunities peers may be using. Cost per Unit Comparing new online service term proposals against peer pricing to identify item-level negotiation opportunities. Discount Levels Comparing new online service term discount levels (institutional, program, or channel discounts) against reseller program information and peer experiences. The avenues of value behind a Microsoft cloud transition plan

Info-Tech Research Group18Info-Tech Research Group18 Microsoft has a language all its own; familiarize yourself with commonly used terminology Client access license Provides rights for a user or device to access and use the server software Client access license Provides rights for a user or device to access and use the server software CAL Can run an instance of Windows locally (in a physical or virtual OSE) Qualified Device Devices that only employ an industry- or task- specific software program Line of Business Device When added licenses are accounted for and reconciled True-Up Rights allow the primary user of device to use Office (with SA) on another machine through Citrix or another VDI tool Roaming Use Rights Enterprise mobility suite EMS Yearly per license cost that provides upgrade rights and additional benefits Software Assurance (SA) Enterprise cloud suite ECS Processors are comprised of cores Physical/ Virtual Core Enterprise agreement EA Server and cloud enrollment An enrollment under the EA for cloud products Server and cloud enrollment An enrollment under the EA for cloud products SCE External connector license (Similar to a CAL for non-employee or contractor access for the benefit of the licensee) EC Large account reseller LAR Remote desktop services RDS Subscription license (or add-on SL – add-on subscription license, e.g. MDOP) SL User subscription license (for online licensing) USL Volume license service center (where past license information and purchases are documented by Microsoft) VLSC Virtual desktop infrastructure (when the system is being run and accessed on a server) VDI