SBS 2008 – Volume Licensing or not?

 
A recent question I participated in at
January 11, 2009 2:12 PM
Solution
Author: tigermatt Date: 12/27/2008 – 02:12PM PST
Title: SBS 2008: Volume Licensing or not?
Tags: Microsoft Small Business Server, 2008, Licensing, Volume or Retail
Zones: SBS Small Business Server, Intellectual Property, Microsoft Server
Author’s Account Type: Qualified Expert
Author’s Subject Experience: Unknown
Time Zone: Greenwich Mean Time (GMT±00:00)
Points: 500
I am looking to install a 2008 Small Business Server for a client in the next few months. I am, at present, weighing up whether it would be worth having the client sign up to a Volume Licensing agreement (one of the “Open” plans, from what I can tell, would be best suited to the company’s size) or purchase all the software – SBS, Vista and Office 2007 – through retail channels.

The business is a typical small business, currently running out of a small premises and in desperate need of a server to centralise file management, email, their website and so on. The scope of the project as it looks at present is as follows:

1 x Server running SBS 2008 Standard Edition
3 x Desktop PCs (although it could easily be 5 by the time the project comes round) to run either Vista Business or Premium
3-5 x Office 2007 Small Business Edition Licenses (basically every PC having Office 2007)
5x User CALs for SBS 2008 at this stage

Would you recommend I go down the Retail or Volume Licensing route? I am particularly interested in the Software Assurance capability of Volume Licensing, and my client would be interested in the ability to spread the payments over several instalments, but being someone who has never ventured into the world of Volume Licensing on a project by myself, I don’t know exactly what I’m walking into.

Essentially what I want to do is best prepare the business for the future. I have no reason not to purchase the software through conventional retail suppliers at this stage, but then when the company rapidly expands across several offices in many different locations in the coming years, I want to easily be able to add on licenses for software via the most cost-effective route.

Any words of advice for a Volume Licensing newbie?

Assisted Solution
Author: MPECSInc Date: 12/27/2008 – 02:21PM PST
Open Value Agreement with the 3 Year Spread Payment Option:
http://blog.mpecsinc.ca/2008/11/sbs-2008-open-value-3-year-spread.html

All of our clients are on License + SA for SBS, Vista + MDOP, and Office.

You get TechNet Plus Direct, 1 phone support incident, e-Learning and more.

Office gives them their office licenses, the above, plus they get Use At Home Rights. If they have 10 Office 2007 + SA on Open Value, they get a “free” copy for their employees to use at home. There is a nominal shipping charge once the employee registers for their copy. Essentially, 2 for 1!

Philip

 
Author Comment
Author: tigermatt Date: 12/27/2008 – 02:26PM PST
Philip,

Thanks. Even that bit of information is of great use to me!

The bit I am finding difficult to understand is whether I can sign up for this agreement when the client is, at present, having only 3 Desktop PCs. This is most definitely going to grow – there is no doubt about that – and I can see them moving to larger premises over the next year or two with many more people working for them, but would someone be willing to sign me up for a Volume Licensing agreement in this situation?

Are you aware of the potential cost savings?

Thanks once again,

-Matt

 
Expert Comment
Author: MPECSInc Date: 12/27/2008 – 03:28PM PST
An Open Value Agreement does have a 5 unit lower limit.
SBS OS + SA (incl. 5 CALs) = 1 Unit
Office 2007 Lic + SA = 3 Units (4 total)

If you do a dedicated remote desktop via an Intel Mini-ITX box in the server closet you can do Vista SA + MDOP 12 month + Office 2007 which adds 3 Units. They get a dedicated desktop if they have a laptop outside of the network for RDP access, the admin gets a desktop to work from when needing to manage SBS via RSAT. Win-Win … and we do this kind of setup for most of our clients.

You could put Vista Lic + SA, and MDOP on the three desktops which gives license portability if they are licensed OEM, plus all of the Microsoft Desktop Optimization Pack goodies which are phenomenal. That would give you 6 Units. BTW, it is not expensive for the pair per desktop OS.
Vista Up Lic + SA = TechNet Plus Direct, Vista Ultimate, Vista Enterprise, Desktop Virtualization Rights, Support Incident, more …

Otherwise, there are a number of Open Value SKUs your disti licensing specialist can help you queue up to meet the 5 minimum.

Philip

 
Expert Comment
Author: TechSoEasy Date: 12/28/2008 – 08:44AM PST
Matt,

First of all, let me clarify something, even though I don’t think it really matters in your case. SBS 2008 comes with 5 CALs which are considered to be 5 separate “units” and therefore qualifies for Open Licensing programs on it’s own.

Then, the choice isn’t just between Open Licensing and Retail… there’s also OEM. For your scenario, I would probably go with OEM licensing as the benefits of licensing probably don’t outweigh the substantial cost difference, and there’s no real benefit of buying retail (FPP) over OEM other than the fact that it can be transfered to new hardware. Since you are buying all new hardware anyhow, then the value of OEM really comes into play. We always use OEM (with Dell Equipment) when we do a completely new install. If you are building the machines yourself, you can buy OEM licenses from your distributor (ie Ingram Micro).

FYI, if you were upgrading from an SBS 2003 installation, then it might be better to go with licensing
(http://blogs.msdn.com/mssmallbiz/archive/2008/01/16/7136077.aspx), but that’s a discussion for another time.

So, all you need to do is get the server with SBS 2008 and workstations with OS + Office. No need for any additional CALs until you have more than 5 USERS. I would also recommend that you go with Vista Business. Ultimate is really just a bunch of bloatware that is not needed in an office environment.

If your client is interested in spreading payments, then they probably should be looking at leasing through Microsoft (http://www.microsoft.com/smallbusiness/buy/software/overview.aspx#FinancingOptions) which would allow them to include all the hardware, software and even your services to install and configure the new network.
OEM’s such as Dell or HP also offer these types of programs.

Licensing is always a confusing topic. Please let me know if you need any clarification on the above.

Jeff
TechSoEasy

Expert Comment
Author: TechSoEasy Date: 12/28/2008 – 08:53AM PST
More info on Microsoft Financing:  https://www.microsoftfinancing.com

Jeff
TechSoEasy

 
Author Comment
Author: tigermatt Date: 12/28/2008 – 08:57AM PST
Thanks for that Jeff. The bit regarding the minimum number of units was what was getting quite confusing for me, and as I’m sure you’re aware a lot of the information on the Microsoft site is quite wordy and difficult to get your head around.

I am having my client buy all new PCs through Dell, so I guess I could have Vista Business pre-installed as an OEM license on the PCs. It’s only £40 more (UK money) to upgrade the Vista on the PCs to Vista Business, so I think that is what I will go for rather than license it fresh. I didn’t think Vista Ultimate would really be suitable for a business environment.

It is the Office 2007 and SBS 2008 licensing which breaks the bank, but then if I went for OEM it looks as if through my supplier I’d be able to shave about 50% off the Office licenses, and almost 40% off the SBS licenses, comparing it back to the Retail product.

With regards to the Volume Licensing route, just out of interest, what sort of prices are we talking? Are the prices for Volume Licensing along the lines of OEM licenses or FPP licenses, or somewhere in between? That will probably be the deciding factor as to which route we take.

Thanks for the info so far!

-Matt

Expert Comment
Author: TechSoEasy Date: 12/28/2008 – 10:13AM PST
Your estimates are about right.  Pricing of OEM will save you about half compared to FPP.  OL is actually just about the same as FPP.

For Example… SBS 2008 Standard:

FPP (SKU T72-02383) will run about £975
http://www.google.co.uk/products/catalog?hl=en&q=T72-02383&cid=11792922414993053964#ps-sellers

Open License (SKU T72-02558) will run about £975
http://www.google.co.uk/products/catalog?q=T72-02558&hl=en&show=dd&cid=10321677517685466030#ps-sellers

OEM (SKU T72-02453) will run about £475
http://www.google.co.uk/products/catalog?q=T72-02453&hl=en&show=dd&cid=17355944642754872307#ps-sellers

We generally get Office licenses from Dell, because they offer good pricing on Small Business Edition.  Work with your sales rep there to bet the best prices… especially if you order towards the end of the month when they are trying to meet their sales goals.

Jeff
TechSoEasy

Expert Comment
Author: MPECSInc Date: 12/28/2008 – 02:04PM PST
Jeff,
The CALs included with SBS do not count as units. They are <i>included</i> with the product. I suggest the Microsoft Licensing Advisor for confirmation:
http://www.microsoft.com/licensing/mla/default.aspx

My first post here has a link to one of our blog posts with the appropriate Open Value part numbers for SBS.

In the long run, licensing via Open Value is the best value IMNSHO. Once the three year agreement is up, renew with SA only, the cost goes down, but the SA benefits remain. Makes way more sense than OEM for clients that refresh their hardware every two or three years.

Philip

Expert Comment
Author: MPECSInc Date: 12/28/2008 – 02:09PM PST
Also, we are talking about Open Value Licensing. That is <i>not</i> Open Licensing.
They are two different animals.

Open Value gives you the option of spreading your payments, one up front, and one each on the anniversary of the agreement date. Costs are generally 20% higher than FPP over the duration of the agreement. But, you are getting your license plus SA, and on office your Home Use Rights!

Open License requires payment up front.

Please use the above linked License Advisor to run through your licensing need. Choose OPEN VALUE for your program. Do not do a Subscription agreement as you will not own the licenses at the end of the agreement.
Here is the link again:
http://www.microsoft.com/licensing/mla/default.aspx

Cost is not everything when it comes to value for what you are getting.

Philip

Expert Comment
Author: TechSoEasy Date: 12/28/2008 – 03:09PM PST
Philip… I’m really sorry to say that you are TOTALLY wrong about this.  SBS alone qualifies for Open License (or Open Value License).

I’d really like you to justify how you say that for an organization of only FIVE people, that it is a better value to spend over THREE TIMES as much.

“Makes way more sense than OEM for clients that refresh their hardware every two or three years.”

That’s an exaggeration as well.  I always recommend that my clients get on a FOUR-YEAR refresh schedule.  With only 5 users, the server will certainly last at least that long, so they would probably stretch it to 5 years.

SA has very little value to 5-person companies.  I’ve never had a client of that size that would have benefited from SA.  Larger clients do get some benefit because the cost of the server is spread among many more users.

I think David Schrag has summed up licensing best in his blog post:
http://davidschrag.com/schlog/85/the-small-business-desktop-advantage-is-neither-a-desktop-nor-an-advantage-discuss-and-discuss-and-discuss

(He is attacking the Small Business Desktop Advantage program, but it applies equally to this situation).

Look… I’ve been a Microsoft Licensing Specialist for a number of years now… I deal with it all the time.  It scales very nicely for larger organizations… but for this one… NO WAY!

Jeff
TechSoEasy

Expert Comment
Author: MPECSInc Date: 12/28/2008 – 03:30PM PST
Jeff,

The screenshots speak for themselves.

Before condemning someone as TOTALLY WRONG … please get your facts straight. Note the line in RED that states quite clearly that SBS on its own does not qualify for Open Value.

And, shall we agree to disagree?

Philip

Expert Comment
Author: MPECSInc Date: 12/28/2008 – 03:38PM PST
Hmmm … on closer examination, the part number in the licensing advisor does not match up with the part number in the above blog post which was obtained from an earlier version of the Advisor.

Jeff … I may need to eat a black feathered bird here. I will confirm with our MS Licensing contact, as in my conversations with him to date, since getting into Open Value I was always under the impression that SBS did not qualify on its own.

But, as I reread those red lines, the Open Value Agreement is not specifically mentioned … my apologies and I stand corrected.

The wires are crossed, so I will get them uncrossed and make sure I have the right information for the next time.

Philip

Expert Comment
Author: TechSoEasy Date: 12/28/2008 – 06:19PM PST
Philip,

No problem.  I won’t ever be that adamant in a retort if I’m not absolutely sure.

I rarely quote Eric Ligman, but in this article ( http://blogs.msdn.com/mssmallbiz/archive/2005/05/11/416690.aspx )  he says:
“SBS Server by itself fulfills the (5) license minimum for Open License Business”

It’s been that way for a long time, and SBS 2008 isn’t any different in that regard.

So, now that I have a few moments, let me demonstrate the actual difference in cost.  (I’ll do it in USD because that’s the pricing I have).

SBS 2008 Std OEM (T72-02453) $784.26

SBS 2008 Std L + SA (T72-00882) $1,674.00  (that price covers the required 3-years of SA)

Now, to be fair, if the company thinks they will benefit from having SA, you could add 3 yrs of it to the OEM license  (T72-00897) within 90 days of purchase for $624.67.  That makes a total of  $1,408.93, but it’s still less money.

Plus, you can get those SKU’s from Dell when you order the server so it’s one-stop shopping.

Licensing is always confusing, so hopefully our little debate will help a few others as their looking for some kind of clarity.  🙂

Jeff
TechSoEasy

Author Comment
Author: tigermatt Date: 12/29/2008 – 03:02AM PST
Thanks for all this info guys. I’ve fired a few emails off to a few companies, just to get some pricing back from over here.

Just a quick one before I close this: since OEM is cheaper, and you can still add SA to an OEM license within 90 days of purchase, what are the benefits of Volume Licensing? To me, it seems that it is more expensive to go down that route, with the only benefit you are getting being the ability to move the software between hardware, whereas with OEM you can’t do that?

Matt.

Accepted Solution
Author: TechSoEasy Date: 12/29/2008 – 03:23AM PST
Matt,

It’s a bit more than the ability to move the software. There is actually a complete, separate agreement governing volume licensed software (PUR — or Product Use Rights), as compared to OEM which has the EULA (End User License Agreement).

From the Microsoft Licensing FAQ page:

“The End User License Agreement (EULA) is associated with retail and OEM software. The Product Use Rights (PUR) document is associated with Volume Licensing. The OEM use rights are between the customer and the OEM. The retail and Volume Licensing use rights are between the customer and Microsoft. Volume Licensing customers are provided additional benefits, such as re-imaging and downgrade rights, that may not be available in other software channels.”

(http://www.microsoft.com/licensing/resources/faq.mspx)

But as I mentioned earlier… many of these “benefits” don’t really mean anything to a company that has only 5 users. Especially if you are a Microsoft Small Business Specialist, because then you get additional support from Microsoft to assist your clients even if they are using OEM software. (ie, Business Critical Support, which is Free from Microsoft: https://partner.microsoft.com/UK/40012229?PS=95000014)

Good Luck!

Jeff
TechSoEasy

Expert Comment
Author: MPECSInc Date: 12/29/2008 – 08:24AM PST
Jeff,
Thanks for the link … I was able to dig back and find our Canadian version.
Philip
Expert Comment
Author: MPECSInc Date: 12/29/2008 – 08:26AM PST
Matt,

Full license + SA makes sense when the company goes past that 90 day mark for attaching SA to OEM.

Philip

Expert Comment
Author: TechSoEasy Date: 12/29/2008 – 09:01AM PST
“Full license + SA makes sense when the company goes past that 90 day mark for attaching SA to OEM”

Philip… not trying to harp… but that doesn’t make sense either.  The 90-day mark only applies if you bought OEM.  In which case you wouldn’t want another full license for the server.

Jeff
TechSoEasy

Expert Comment
Author: MPECSInc Date: 12/29/2008 – 09:03AM PST
Okay … my eyes were crossed when I typed that! 8*O

Philip

Expert Comment
Author: TechSoEasy Date: 12/29/2008 – 09:04AM PST
No prob…   🙂
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