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License Negotiation Case Studies

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License Negotiation Case Studies 2016-12-21T15:00:02+00:00

At Emerset, we have helped companies achieve substantial savings in virtually every industry, and here are some of their stories. If you don’t see a similar situation to yours, contact your licensing experts at Emerset Consulting. With more than 500 companies in our case history, we are likely to have a comparable example.

The licensing experts at Emerset Consulting have helped numerous companies devise sound software agreement negotiating strategies. We can help your company, too. To take the first step in improving your strategy, fill out the contact form on the right-hand side of this page.

Banking

Company: International Bank, $5 billion revenue, Branches in 20 countries
Hardware: 15,000 desktops, 1,200 servers

What Happened:

The company brought in Emerset after receiving Microsoft’s initial proposal. Emerset conducted benchmarking and full financial analysis of proposed agreement and alternative licensing schemes. In negotiating the software licenses, a favorable agreement was reached. Emerset cross-checked it to ensure that all of the agreed points were included. Post agreement, Emerset continued to support the company to ensure its employees made productive use of their software assurance benefits.

Result: $3 million savings

Defense

Company: Defense Contractor, 30,000 employees
Hardware: 20,000 desktops, 1,000 servers

What Happened:

Going into their third consecutive Enterprise Agreement subscription renewal cycle, Emerset analyzed the roadmap, historical upgrade cycle and financials, and concluded that the current subscription model was not financially justified going forward. With assistance from Emerset’s Microsoft licensing experts, the company renegotiated a new Enterprise Agreement with perpetual use rights at a price almost identical to the previous subscription model, retaining the budget framework and setting the stage for an expected cost reduction in the next renewal cycle in three years based on the assumption of renewing Software Assurance only.

Result: Moved from a subscription to a perpetual agreement at the same cost with a six year ROI of $2.5M

Company: Defense Contractor with over 20,000 employees
Hardware: 15,000 desktops, 800 servers

What Happened:

This highly secured organization had a specific need for secondary desktops for many of their workers, with one desktop connected to the internal network and the other connected to the external network. Each user of this type required two copies of Office®. Based on a cost analysis, the decision was made to move to Office 365® E3 licensing, which provides use rights based on five devices per user, thus reducing the total number of office licenses needed by 30%.

Result: $1.5 million savings

Freight

Company: Global freight company with 15,000 employees
Hardware: 600 servers

What Happened:

The company had two different types of users, standard information workers in the headquarters that required MS® Office Professional, Windows® OS and Core CAL, and branch tellers, who needed a simple POS device with Outlook®. To have Outlook on the POS’s devices, the company was paying for the entire Office® suite. Emerset instead defined two different licensing profiles, a full professional desktop for headquarters, and a second, more limited profile for the branches, which included Core CAL only and Outlook Web Access. Several Office 365® licenses were obtained for headquarters employees that use tablets in addition to their regular desktop, in order to share the Office license between multiple devices.

Result: $2.1 million savings

Government

Company: National government with 150,000 employees

What Happened:

A national government procurement office needed to negotiate a framework agreement on behalf of every government ministry, comprising a vast diversity of user profiles and needs. Each ministry had different types of users with different requirements, and additional products needed. The new framework agreement had to have enough flexibility so that each ministry could construct its own enrollment, based on pre-negotiated terms and conditions, including discounts and payment terms. Together with Emerset, five key profiles were defined, including a pool of additional possible products that had pre-determined price discounts and future True Up costs, that met all of the technological requirements of each ministry throughout this vast governmental organization.

Result: In negotiating software licenses for all ministries, met the organization’s business need for flexible profiles and additional products at preset price and terms and conditions.

Healthcare

Company: National Health Maintenance Organization (HMO), $4 billion revenue, over 4 million patients
Hardware: 25,000 desktops and laptops, 2,400 servers

What Happened:

The company needed to perform a comprehensive upgrade refresh to its desktop and server software in the upcoming two years. Emerset executed financial and business analysis of additional possibilities that would not have been proposed by Microsoft and performed benchmark analysis. Emerset prepared the negotiating team and managed behind the scenes until a cost effective agreement that met budget and IT requirements was achieved, at which point it was cross-checked against a predefined checklist. Post-agreement checks also took place.

Result: $1.8 million saved, terms met the company’s business needs for upgrades and growth.

Insurance

Company: Leading insurance company with $64 billion market cap and 220,000 employees
Hardware: 2000 servers and a large variety of additional products

What Happened:

This company has a very active and well-informed Software Asset Management practice, with well-defined processes and tools in place. Emerset was engaged to take a fresh look at their SAM practices and to validate their current practices. Together the SAM team and Emerset’s Microsoft licensing went strictly through Emerset’s Clear Licensing Methodology, through which they identified several areas for optimization, such as Disaster Recovery (DR), test machines and customer acceptance machines. Together they were able to clarify requirements around device CALs and user CALs and optimize SQL server environments by utilizing MS product use rights around active-active and active-passive servers. In addition, virtualization requirements were re-defined, helping mitigate Windows server overage.

Result: $25 million savings over previous agreement

Manufacturing

Company: Major North American manufacturer, with over $6 billion revenue and $47 billion market cap

What Happened:

This company’s experienced in-house Software Asset Management team had negotiated the previous agreement. They engaged Emerset six months prior to their renewal date to do an onsite workshop to ensure they were optimizing their software asset agreements. This was followed by a full implementation of Emerset’s Clear Licensing Methodology. The workshop and project scope followed Emerset’s CLM process, bringing together the relevant people within the organization to determine a tangible optimization path based on inventory and roadmap discussions. The company had set an aggressive stretch goal for license savings, which it exceeded as a result of the CLM.

Result: $1.7 million saved from previous agreement, while increasing their product line and total number of desktops; exceeded stretch goal by 7%

Pharmaceuticals

Company: Global pharmaceutical company with 60 sites, 46,000 employees, $32 billion market cap
Hardware: 1800 servers and a large variety of additional products

What Happened:

The company had never had an Enterprise Agreement, with each of its 60 sites purchasing under a separate select enrollment for that country. Dispersed purchasing meant that there was no standardization across the company, and no leveraging of volume discounts. In some cases the company was double-buying because it had not established protocols or software asset management guidelines for sharing of software across the company. Part of the company’s long term IT strategy was to standardize the desktop throughout the company globally and establish a global procurement organization responsible for overall IT procurement. Part of this process was to migrate from a competitive mail and collaboration infrastructure to a Microsoft Exchange and Sharepoint environment. Over the course of several iterations, the team built a systematic plan based on its clear vision for the future, leading to a global enterprise agreement with Microsoft.

Result: $4 million savings over the options provided by Microsoft

Professional Services

Company: Global financial professional services company with 152,000 employees

What Happened:

This company was stuck in a difficult negotiation cycle with Microsoft. Microsoft was insisting on benchmarking this company against others that had less favorable terms than Emerset has been able to achieve for its customers. Emerset presented information to the company to expose that they were not being offered the best possible discount and overall terms and conditions. As a result, in an unprecedented step, Microsoft prepared a presentation for this client outlining its discounting policy for its 15 top clients with a similar profile and in a similar vertical.

Result: $3 million in savings compared to their previous agreement

Publishing

Company: Global publishing company with $6.4 billion market cap and 40,000 employees

What Happened:

In earlier years, the company was able to achieve a very significant discount, however in the second engagement, Microsoft revoked this discount and started again from scratch. Having already gone through an aggressive optimization process, there was not much to take off the table, so together with Emerset the company sought something new to leverage in its discussions with Microsoft. A key opportunity that was identified was that the company was looking to implement Microsoft Lync® products as its communications platform. In addition, the company had increasing BYOD requirements. So the decision was made to benchmark Office 365 E4 full communication package which was compared with staying with the standard EA desktop professional package. Dropping Microsoft Office from the professional package was even considered. The company had a very strong Best Alternative to Negotiated Agreement (BATNA) since they could have stayed with their current online conferencing solution and walk away from Microsoft Lync. In the end, the company was able to negotiate a flat renewal cost, while achieving a remarkable increase in the value of the overall desktop software they received.

Result: Full E4 package for same price as standard desktop in previous agreement

Technology

Company: F500 global company
Hardware: 70,000 processors, managed by a team of 40 people

What Happened:

As this global company entered the final year of its $10 million Oracle® Unlimited License Agreement (ULA), its asset management team needed to determine the appropriate next steps for when the ULA would expire. Emerset and its partner B.Lay did a thorough analysis, and gave specific recommendations that the company roll out additional Oracle software programs in order to maximize the value of the ULA. Because of the thorough and documented process, the company was able to certify its usage of $40 million worth of Oracle software for a perpetual license.

Result: $30 million in savings through Oracle certification

Company: Optics Research, 5 branches across the United States
Hardware: 156 devices; 30 servers (many of them virtualized)

What Happened:

This optics research company enlisted the services of Emerset to manage and mitigate its self-audit process. Emerset responded directly to Microsoft to acknowledge receipt of the audit request and then implemented its comprehensive pre-audit plan, followed by its proprietary Clear Licensing Methodology. Emerset conducted a complete inventory analysis and cross-check, as well as a financial analysis to guide the company’s future Microsoft purchases. In addition to the financial savings, Emerset provided a well-defined inventory report, licensing statement and official auditing procedures for future expansion or audits.

Result: Saved $60,000

Company: Global software company with 20,000 employees, serving 40 countries
Hardware: 1500 servers

What Happened:

All of this company’s systems are fully integrated with Microsoft, making it highly dependent on the software giant. The company has a large mobile workforce, with over 30% working at customer sites. The company had defined a very aggressive budget, and Emerset counseled the renewal team about what would be a realistic achievement in negotiating software licenses within its framework. Through extensive needs analysis, it was determined that a large number of users had MSDN Ultimate licenses, but did not need such an extensive license. Redefining these profiles enabled the company to downgrade almost 70% of these users from Ultimate to Premium and Professional Edition. Further savings were achieved by dropping maintenance on MS Project and Visio, and discontinuing Software Assurance on a large number of Windows servers that did not need it. In addition, a very aggressive negotiating strategy was able to drive significant discounts, enabling this company to exceed its hardline budget definition.

Result: $6 million savings

Telecom

Company: National telecom operator with 21,000 desktops spread among several subsidiaries, including a mobile operator, landline operator and Internet service provider.

What Happened:

The challenge in this customer engagement was to help corporate procurement negotiate a framework agreement that would meet the needs of the affiliate companies, each of which had different business and technology requirements, and were in fact separate organizations that had been merged over a period of several years. The result: flexible profiling options that each subsidiary could choose from based on a single master agreement. Each subsidiary can stay independent, purchasing licenses directly with their budget and having their licenses registered on their company subsidiary name, but still benefit from the discount and flexibility of the profiles pre-negotiated. Best of all, the subsidiaries receive a higher discount level on license purchases due to overall size of consolidated organization.

Result: $3 million savings