New Microsoft agreements: EAP “Enrollment for Application Platform” and EAI (“Infrastructure”)
Author: Steven Zolman
Continuing its direction toward rental-based agreements, Microsoft has recently been pitching EAP’s and EAI’s to some of its customers. Simply, these agreements are the “low interest mortgage loan with a large balloon payment at the end” of the licensing world. The customer forecasts a growth rate for covered products such as SQL Server, Visual Studio, etc, and only pays a lower rate during the 3 year term of the agreement. Looks great when you see the pricing in comparison to straw man of a ‘business as usual’ mock up…
Until you realize, that at the end of the agreement you must either renew (at a price that Microsoft decides) or lose the right to continue using the software for which you have been paying. (That’s the Balloon Payment part — the license rights and grants).
Does anyone find it surprising that Microsoft sales teams often forget to mention that last part?
Advice to Clients:
- Read the contracts before going too far down the pricing path
- Always understand your exit strategy before signing the deal
- Get the expert assistance you deserve by engaging NET(net) to help you evaluate all your options and make the choices that deliver long term sustainable value for you and your organization.
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