It's not too soon to think about Windows 8 licensing

Microsoft licensing is getting even more convoluted with the future release of Windows 8. Our expert explains why it's a good idea to start thinking about licensing Windows 8 now.

While Windows 8 may be a year or more from release, organizations that have the operating system on their IT roadmaps should start planning their Windows 8 licensing strategy now. They can even start licensing the product today to achieve a standardized desktop more quickly.

Getting past XP

The debate about Windows 8's real value for business may have already begun, but Windows 8 will be the ultimate refuge for many remaining holdouts still on Windows XP, for which support will end in 2014.

Most organizations will want to be on a supported OS by then, with Windows 7 and Windows 8 being the best prospects. Windows 7 deployments can be completed before the deadline, but few large organizations will be able to evaluate Windows 8 and plan and execute a full deployment between its release and the end of support for Windows XP. That makes planning for the Windows 8 upgrade critical for organizations that expect to make it their Windows XP replacement.

The upgrade spectrum

An organization's strategy for getting to Windows 8 depends on where it is today.

Most customers with Enterprise Agreements (EAs), Microsoft's three-year agreement for companywide licensing of desktop software, have already made their licensing decisions. Software Assurance (SA), Microsoft's upgrade and maintenance subscription, is added to all licenses purchased in an EA, so customers who included Windows in an EA signed in 2010 or later are already paying for Windows 8 upgrades. (For this article, let's assume that Windows 8 will be released at the end of 2012.)

The following groups aren't yet paying for Windows 8:

  • Customers who signed their EAs in the third quarter of 2009 or earlier.
  • Customers whose EAs don't cover Windows (roughly 50% of EA customers).
  • Customers without "active" SA subscriptions for Windows through some other volume program.

Windows 8 licensing strategies

The strategy that is best for an organization depends on its goals.

Do you want to minimize costs? Standardize all PCs on the same OS? Deploy SA benefits, such as virtualization rights?

Three licensing strategies -- incremental upgrading, accelerated standardization and OS subscriptions -- are good starting points for realizing some of those goals.

Incremental upgrading

This name is grander than the reality: The cheapest solution is a "do nothing" approach. The customer simply gets whatever OS comes with new or replacement PCs. It's a strategy that gained popularity with Microsoft's Vista debacle, when customers paid up to $325 per PC for six years of SA upgrade rights for an OS they never deployed.

This strategy, if it can be called that, works best for customers that can tolerate an environment with a mixture of OSes. Versions of Microsoft's desktop OSes generally coexist happily, so this boring strategy is generally safe. The main problem is adapting custom or commercial software. Customers should focus on applications that can run in a Web browser, rather than directly on the desktop, in order to survive OS upgrades, an invasion of iPads and other OS idiosyncrasies.

Accelerated standardization

Organizations that want to standardize on Windows 8 but are not in a rush can start purchasing licenses for it today via SA upgrade rights. As long as their agreements are "active" when Windows 8 is released, they get the upgrade.

Starting now, these customers should order SA for the OEM Windows license on each new PC they purchase. They have 90 days from the date of purchase to buy SA. I recommend that these businesses consider purchasing SA through Microsoft's simplest volume-licensing agreement, Open License.

Although Open License discounts aren't the best, SA is always purchased for the term of the volume agreement, and the two-year Open License is a year shorter than all other Microsoft volume programs. By buying SA for two years rather than three, customers effectively get an additional 33% discount, and the $108 cost for two years of SA through Open License beats the best discounts available through other programs.

How does this help you standardize? By adding SA, every PC purchased from now until Windows 8 is released can be upgraded to Windows 8 at no additional cost, and the organization that plans to standardize incrementally gets a head start this way.

For example, an organization that replaces 20% of its PCs each year and begins purchasing PCs with Windows 8 only after its release will take until 2017 before all of its PCs are licensed for Windows 8. By purchasing SA now, it can get there a year earlier.

Since many organizations are still running Windows XP on older PCs, they may want to accelerate their hardware replacement schedule. By bumping up the pace to a 33% annual replacement rate, they can get there in 2014 if they start now rather than wait for Windows 8's release.

Another benefit is access to Windows Enterprise Edition, an SA-only Windows edition with many features that are particularly valuable on portable computers. SA offers a perpetual license for that edition of the OS, even after the PC's SA coverage expires.

Accelerated standardization can also be a good strategy for organizations that want to explore a virtual desktop infrastructure that requires SA virtualization rights. Those rights aren't perpetual, so they'll terminate when SA ends, but they can be used to run legacy XP applications for two years while waiting for developers to upgrade them. If the organization wants to continue using VDI after two years, it can renew SA.

OS subscriptions

The OS subscription is about 65% the cost of an EA because, unlike the EA, it doesn't require customers to buy OS upgrades they don't need. For an organization with 10,000 computers, that saves about $750,000 over three years.

Regular EAs require customers to buy an immediate upgrade to Windows 7 for any new computer, even if it's already running Windows 7. They can't install that upgrade on any other PC. In other words, they're forced to purchase an OS license they can't use.

In contrast, an EA Subscription (or an Open Value Subscription for organizations with fewer than 2,000 PCs) doesn't offer perpetual licenses, only a temporary subscription. When the subscription ends, so do the Windows 8 licenses an enterprise was "renting." Big problem, right? Not in the case of the OS.

The trick to this strategy is timing. Ideally, the organization will subscribe to the OS the moment it becomes available on OEM PCs. During the three-year term, the subscriber replaces all of its PCs with new ones. All of these new computers will come with an OEM license for Windows 8 Professional.

When the subscription ends, the customer's right to use the software also ends. However, since all of its computers now have an OEM Windows 8 license, terminating the subscription Windows 8 licenses has no impact.

Some caveats apply.

Because SA rights in a subscription are not permanent, organizations should avoid deploying the Enterprise Edition or making a long-term investment in desktop virtualization. Continuing these rights after the subscription ends could be costly.

If the customer hasn't replaced all of its PCs (and thus gained OEM Windows 8 licenses) by the end of the agreement, it would need to purchase Windows 8 upgrades for any remaining PCs that don't have a Windows 8 license. Better yet would be to bite the bullet and replace the remaining old machines, even if they're not scheduled for replacement for another year. The reason: Any upgrades purchased for them aren't transferable to their replacements, so money for OS upgrades might be better spent buying the replacement PCs.

Read more from Paul DeGroot

About the author:
Paul DeGroot is a writer, trainer and principal consultant at Pica Communications, which specializes in Microsoft licensing strategies and policies.

This was first published in October 2011

Dig deeper on Software license management in mobile and cloud environments

Pro+

Features

Enjoy the benefits of Pro+ membership, learn more and join.

0 comments

Oldest 

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to:

-ADS BY GOOGLE

SearchEnterpriseDesktop

SearchVirtualDesktop

SearchVMware

SearchCIO

SearchSecurity

Close