Microsoft and the Midmarket

Posted by Trevor Pott on Nov 5, 2012 in Blog | Comments Off on Microsoft and the Midmarket

This post was originally published in a slightly altered version on www.trevorpott.com, October 1, 2012.

 

Microsoft’s licensing is a problem. For a company that makes its bread and butter on the midmarket, they sure can seem hostile to those of us who live and work in this arena.  Indeed, Microsoft’s licensing compares more accurately to other enterprise players.  Oracle licensing is byzantine and overtly a profit-maximization approach, but they don’t have anywhere near as many SKUs in play as Microsoft. IBM is a good comparison; they have a similar number of SKUs, and no incentive to make their licensing comprehensible to normal people.

Contrast VMware to Microsoft as a “complete experience.”  Microsoft’s offerings are incredibly powerful.  As this review clearly shows, the joined-up nature of the System Center suite can enable a “total package” that overwhelms anything VMware can bring to bear.   That said, VMware licensing is simple. Truly understanding Microsoft’s licensing – enough to make sure you aren’t paying a dollar more than you have to – is a career that requires the full time efforts of an intelligent, educated individual.

VMware’s products are comparative child’s play to install and administer.  It took me three weeks of concerted effort to install a test lab with enough software to test System Center Suite 2012 against its two immediate predecessors. To contrast, it took less than an hour to do the same with VMware.

Interaction with Microsoft’s licensing department always leaves me with the impression that I’ve been had; there’s a scam afoot and I’m not the one running it.

I can’t speak to how Microsoft treats their customers with over 1000 seats. My customers are all between 1 and 1000 seats. Most are between 50 and 250 seats. What I can say is that in this area, I dislike dealing with Microsoft intensely. Microsoft doesn’t want to deal with us “irrelevant” SMEs directly. They want us to use VARs.  Frankly, I don’t trust VARs at all. Not once in my experience with VARs have I been able to find one who was willing and able to optimise my licence usage. I have saved clients tens, even hundreds of thousands over VAR quotes by doing the legwork myself.

Instead, Microsoft positions their products to be appealing if you have less than 25 seats, or greater than 250. If you live in the 50-250 seat range – where most of my customers do – then the licensing is not only hard to optimise, it is outright punitive. The Microsoft ecosystem between 25 and 250 seats constitutes a barrier to entry for any company; something Microsoft has no intention of addressing in their reckless bid to drive the middle of the bell curve into a subscription model that has a far higher TCO for midmarket organisations than a perpetually licensed item. Doubly so when you consider that most midmarket companies live on refresh cycles for their equipment of 5 or 6 years, not three.

I like Microsoft’s technology. I think they make some of the best software in the world, and inarguably the best in several fields. That being said, I go out of my way to use competing products in many places because of the complexity of Microsoft licensing.  Other vendors may (or may not) be more expensive than Microsoft. That said; when an alternative vendor’s licensing is less opaque – and better tiered! – you don’t walk away from purchases wondering if you could have gotten a better deal if you had only known the ins and outs a little bit better.