Today, software dominates IT. It is present in almost every part of the industry, and most IT products are sold at least partly as software.
Enterprise agreements (EAs) have become part and parcel of the software-focused corporate world. These are site licenses that simplify software use for large organisations. Rather than managing multiple licenses and contracts that expire at different times, an EA means that companies can get the software they need, when they need it, and use it across their business.
EAs help to mitigate the time-consuming and costly purchasing and managing of software, although the annual ‘truing-up’ period can still cause confusion (more on this later). Because of this, software licensing is becoming the de facto model for enterprise IT to follow, with as many as 45 per cent of companies using EAs when they buy cloud software, according to ZK Research.
Cisco’s move to software
Although traditionally a hardware company, Cisco has been moving to a software-first approach for some time. Its new Cisco Enterprise Agreement is similar to other EAs, in that customers can take the products and services that they need and then add additional ones as they grow. The EA covers several portfolios today, with more being added over time.
Two important parts of the new product are the 20 per cent growth allowance and the ‘True Forward’ provision. As standard, the EA includes 20 per cent extra software and software support services, which customers can use on top of what they originally ordered, without paying for more.
Normally, if a company exceeds their original license terms they will pay for new licenses on an annual basis (usually on a retroactive ‘download now, pay later’ scheme): a process known as ‘truing-up’. True Forward is Cisco’s substitute. If a company exceeds Cisco’s 20 per cent allowance, they will not be billed retroactively for overuse. Instead, their contract is revised at the start of their next billing period. Contracts last either three or five years.
As mentioned, the Cisco EA covers several portfolios: infrastructure, security and collaboration. Customers can choose a single suite or a combination, and extend the license later; either way, a single agreement covers all products.
The infrastructure range includes Cisco’s core technologies delivered through Cisco ONE Software suites: Switching, Wireless, WAN, Data Centre Networking, and Data Centre Cloud and Compute. For security, customers will get Cisco’s Email Security Suite; Cloud and Web Security Suite; Policy and Visibility Suite; and Security Essentials Suite. Finally, the collaboration product includes Cisco Spark™ Flex Plan; Cisco Unified Communications Suite; Cisco Meeting Server add-on Suite; and Cisco WebEx® On-Premises Suite; among others.
Cisco EA can be deployed on-premises, in the cloud or in a hybrid fashion. Licenses can also be ported from existing to new hardware. Customers can use an online portal to see what software has been purchased, what has been deployed and what is due for renewal.
Cisco has talked about becoming software-first for years, but it is only now that we are beginning to see it walk the walk as well.
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