Expect a few licensing price hikes

Worldwide, information technology spending this year is expected to total $247 billion with 69 percent of that earmarked for server management and administration. Microsoft has ensured an even larger portion of this by increasing the purchase price on some of its most popular and widely deployed server software.

Jill Van Hoesen

The software giant has announced a 38 percent price increase for SharePoint 2013 and a 40 percent increase for Lync Server 2013.

There is some good news as no increases in server licensing costs for Exchange 2013 and Office 2013 were included in the latest pricing strategy. According to a statement by Microsoft in the January issue of Redmond Magazine, “In the case of SharePoint 2013, the array of previous server licenses have been combined into a new SharePoint Server 2013 license.”

Microsoft has sought to increase the value of its SharePoint Server license by including in the unified server license SharePoint for Internet and extranet sites and Enterprise Search and Sky Drive Pro, a new document storage service for SharePoint. Access to those technologies previously required separate or different licenses. Microsoft also points to added improvements in Exchange 2013, including built-in anti-malware and improved management capabilities. They also will retire the separate connector licensing, but with no change to price.

That doesn’t mean ownership costs will not increase. Microsoft has announced an increase in the cost of user Client Access Licenses by at least 15 percent. With this increase, Microsoft hopes to capitalize on the multiple devices most employees now use. With multiple device use, user CALs can have more value. Software licensing expert Paul DeGroot of Pica Communications accepts Microsoft’s Bring Your Own Device rationale.

“I recommend customers switch to user CALs, even with the 15 percent increase. Since as much as 80 percent of Microsoft revenues come not from server licensing, but from CALs, Mr. Degroot makes the case for user CALs for organizations that permit BYOD scenarios.

“Someone who connects their laptop and their smartphone to get an email from the Exchange server when they are out of the office needs at least six device CALs; one Window and Exchange device CAL for the work PC, portable PC and smartphone. If they have user CALs, they only need two; one Window and Exchange user CAL per user to cover all of their devices.”

A Windows user CAL is $31 and an Exchange user CAL is $68, with volume discounts available. A device CAL starts at $297 before similar discounts. Customers with existing multi-year volume licensing agreements won’t face a price increase until the end of their contract term, but you still need to review your overall Microsoft licensing posture — user versus device CAL — to ensure compliance, especially if your employees continue to BYOD.

Not already a  Microsoft server shop but still want to pick and choose hardware and software components that best suit your needs for increased efficiency, security and performance while tackling complex IT tasks?  Fortunately, we’re in the midst of an exciting era where one-size-fits-all information technology solutions have given way to what Microsoft calls “the new Office.” This means subscription and cloud versions of in-house favorites like Exchange, SharePoint and Lync Server. Microsoft is marketing Office 365 as the best deal, arguing that renting Office in the cloud will ensure access to latest updates and features before single-seat versions.

In addition to Office for iPad, which is expected mid-year, Microsoft also will offer “store” versions of Office client and SharePoint applications, and not be a moment too soon as Microsoft plays catch up with Apple and Google. There are presently a little more than 18,000 apps available in the Windows store compared with 700,000 and 675,000 for Apple and Google, respectively. Will Microsoft be successful in moving existing loyal customers to the cloud, where they are no longer king?

I would love to hear what your business is doing, in-house or in the cloud. Will this latest price hike affect your decisions? Send your stories or comments to jvanhoesen@wdt.net, or comment on this article at www.nnybizmag.com or on our Facebook page, Facebook.com/NNYBusiness. I will share some reader feedback in a future issue.

Jill Van Hoesen is chief information officer for Johnson Newspapers and a 25-year IT veteran. Contact her at jvanhoesen@wdt.net. Her column appears monthly in NNY Business.