Brent Kelly

Brent Kelly | November 19, 2012 |


Expect to Pay More for Microsoft Software

Expect to Pay More for Microsoft Software Some Client Access License (CAL) charges go up, and changes to Lync and SharePoint server options are due to hit smaller users.

Some Client Access License (CAL) charges go up, and changes to Lync and SharePoint server options are due to hit smaller users.

A significant change hits Microsoft enterprise software users on December 1, 2012. At that time, Microsoft will implement a price increase that could have significant impact on many enterprise users.

Perhaps the biggest impact will be in Client Access License (CAL) costs. In the past, customers could order either device CALs or user CALs at the same price. Now, Microsoft will charge a 15% premium for user CALs (device CALs will not increase in price). This price change will also affect enterprises with Core CAL and Enterprise CAL Suites.

A device CAL allows a single device to access the functionality in Microsoft software. With a device CAL, multiple people could use the same device, but not at the same time. An example would be a shared computer in an office in which someone uses the computer part of the day and another person uses that same computer during another part of the day.

A user CAL, on the other hand, allows a single user to access Microsoft software functionality from multiple devices. An example would be an Exchange or Lync user who has a PC, tablet, and smartphone. So people using Lync will need to pay 15% more for the user CAL if they access Lync from multiple devices.

Other changes are in store as well. For example,

* Lync Server 2013 will no longer have Standard and Enterprise versions. So, instead of paying $695 for a Standard version Lync server, organizations will only have the option of buying the $3,646 Enterprise Lync server.

* SharePoint Server 2013 also collapses into a single version--no more standard and enterprise versions. SharePoint will also increase in price by 37%.

* No more Visio Premium. Only Visio Standard and Professional will be available. Visio Standard will increase by 20% while Professional will increase 5%.

* Office 365 will add some Visio and Microsoft Project functionality to its cloud offerings. The price will increase between 5% and 8% depending on which O365 plan you have.

A number of Microsoft server products are impacted by the CAL price increase. Among these are (this is not the entire list):

* Bing Maps Server,
* Exchange Server Standard and Enterprise,
* Project Server,
* SharePoint Server,
* System Center,
* Visual Studio TFS, and
* Windows Server.

It is unclear how many organizations will be impacted by eliminating standard versions of Lync server and SharePoint server. These standard software server editions were used primarily by smaller organizations, so a 400% server software price increase may cause SMBs to look for other options.

When I reached out to Microsoft to get more information on the price increases, the company sent me a somewhat vague reply:

"Microsoft recently notified partners about enterprise Client Access Licenses (CALs) changes so they can inform customers about their options before the changes take effect on December 1, 2012. These CAL changes include a user-based option that offers more value in support across unlimited devices and simplifies licensing management and compliance as devices in the workplace proliferate. Pricing for user CALs will change to reflect the increased value. Customers should work with their Microsoft partner or account team to assess their options."

Gartner has pointed out that the way Microsoft is doing this price hike differs from previous increases. In the past, Microsoft gave customers several months' notice before the price increase. This time, Microsoft told its resellers about the price increase, leaving it up to those resellers to decide whether to even tell end user customers that a price hike was imminent. Those end users that act before December 1 can get in on the existing pricing.

This price hike may give organizations an opportunity to pause and consider what kinds of CALs they really need: device CALs, user CALs, or some combination of the two. Alternatively, it may be time to consider a move to cloud services where the pricing is by the month. Some organizations that use Microsoft's Software Assurance likely have too many licenses, and a cloud model that allows organizations to either ramp up or down the number of licenses they have, with a monthly "true up", may now have added merit.

Brent Kelly is VP and Principal Analyst, Constellation Research.


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