The Department of VA, a 360,000 desktop large organisation announced March 30, that they will be discontinuing there EA and move to a pay per need model.
Roger W.Baker Assistant Secretary for Information and Technology Department said “the market for desktop and server software is changing, with substantial impact from both Cloud service providers and personal mobile devices. In the future we are looking to increase our flexibility and the amount of competition for our business to ensure that we provide the best value and emergent technologies to our customers.
What I’m surprised about is that this did not get more press coverage, this is not an everyday happening when a 360,000 desktop large organisation does not renew its EA, and my estimation is that this was worth to Microsoft® around $300M, a substantial loss in recurring revenue.
I’ve recommended many times to customers not to renew their EA coverage over the years (based on financial backed data), but only a handful or so have actually taken this path, my experience is that customer’s not renewing, actually gain more attention and increased resources from Microsoft® in the long run and increase purchasing efficiency i.e. purchase what they need when they need it.
I do however recommend that organizations always perform a long term (3-6 years) financial analysis combined with an internal and external roadmap analysis (including Software Assurance pros and cons) before taking any long term decisions.
Read the original memo.