Webinar Office 365 Should Trigger A Rethink Of Your Microsoft Licensing Strategy Duncan Jones, Vice President, Principal Analyst April 3, 2014. Call in at 10:55 a.m. Eastern time.

Microsoft’s transformation gives you new opportunities to reduce software costs.

Agenda Understanding Microsoft The changing value of Software Assurance Office 365 migration options Summary recommendations

Agenda Understanding Microsoft The changing value of Software Assurance Office 365 migration options Summary recommendations

Microsoft’s challenges Microsoft needs to keep new revenues flowing in. Its main products are fully mature. How can it keep persuading customers to purchase a new version of Office every three or four years? Many customers skip product releases. SA’s price assumes triennial upgrades. It faces increasing competition from non- Windows devices and from cloud providers.

Microsoft uses suites to grow its reach Office MUI VDA SharePoint $ SCCM Windows Server Exchange Lync

Agenda Understanding Microsoft The changing value of Software Assurance Office 365 migration options Summary recommendations

Office 2013’s biggest competitor is Office 2010 Source: Forrester Desktop Trends Survey 2013

Customers without SA are less likely to upgrade Source: Forrester Desktop Trends Survey 2013

Microsoft’s response: services Office 365 hosted email and file storage Office 365 ProPlus per user subscription Windows Enterprise version Virtual desktop access Companion subscription license MDOP Azure

SA is now about use rights and premium features Office roaming use rights VDI on RT devices Unlimited virtualization of SQL server Source: Forrester estimates

Companion device licensing Corporate- owned device Employee- owned device Device type ↓ Companion PCs SA (no change) Companion Windows RT tablets Windows RT Companion VDA Rights (free) Windows CSL (four devices) Companion non-x86 devices (iPad, Android, etc.) Source: Microsoft

Agenda Understanding Microsoft The changing value of Software Assurance Office 365 migration options Summary recommendations

Microsoft will push you to Office 365 Source: July 12, 2012, “How To Negotiate A Better Microsoft Office 365 Deal” Forrester report

There are three ways to buy Office Select+, no SA EA Office 365 License type Perpetual Perpetual + SA Subscription License metric Per device Per user Deployment Local Additional company devices Each device needs a license Local install on up to five devices Roaming use Streamed is allowed by RUR Streamed or temporary install New versions No Triennial More frequent Downgrade rights Yes Office for iPad

Upgrade rights are key to SA’s value EA duration O365 2013 upgrade starts? Next upgrade? 2017 2012 2013 2015 2016 2014 2018 Wave 15 Wave 16 Wave 17 SQL Server 2012 2012 R2 Windows 8 Before Office 365, assessment was: Will Microsoft release the next version within three years? Can I wait until I know I want it before I buy it? Can I skip a release?

Value of upgrade rights depends on the next but one upgrade Payment holiday O365 2013 upgrade starts? 2012 2013 2015 2017 2016 2014 2018 Wave 15 Wave 16 Wave 17 SQL Server 2012 2012 R2 Windows 8 Before Office 365, assessment was: Will Microsoft release the next version within three years? Can I wait until I know I want it before I buy it? Can I skip a release?

Agenda Understanding Microsoft The changing value of Software Assurance Office 365 migration options Summary recommendations

Use Forrester’s strategic software sourcing model Optimized commercial approach Price, flexibility, risk Supplier tiering Do we want to buy more, or reduce our dependence? Category strategies Sole or multisource? Standardization versus autonomy? Supplier’s portfolio Opportunities and threats Commitment versus uncertainty Source: Forrester’s Strategic Software Sourcing Playbook

Next steps Educate stakeholders about the licensing implications of various deployment options. Link the EA discussion with later product choices. E.g., databases, server management. Secure a cost-effective migration path to Office 365.

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Selected Forrester research April 8, 2013, “Evaluating Microsoft’s Software Assurance” January 7, 2013, “Product Spotlight: Microsoft System Center Configuration Manager 2012” August 29, 2012, “Microsoft SQL Server 2012 Licensing Changes — What You Need To Know” August 24, 2012, “The Future Of Microsoft .NET: New Options, New Choices, New Risks” July 12, 2012, “How To Negotiate A Better Microsoft Office 365 Deal” November 29, 2011, “Microsoft’s Shrinking Window For Tablets” May 26, 2011, “Top Barriers To Replacing Microsoft Office” May 24, 2011, “Consider These Five Criteria When Choosing A Microsoft Volume Licensing Program”

Duncan Jones djones@forrester.com Blog: http://blogs.forrester.com/duncan_jones www.forrester.com