Per-User CAL Prices Raised 15%

Posted: 
November 19, 2012
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Licensing client access to the latest versions of many server products—including Exchange and SharePoint Server 2013—will cost more under certain conditions starting Dec. 1, 2012, although some volume license agreements insulate customers from price changes for several years. Customers generally have the option to license client access to on-premises server products by purchasing per-user or per-device licenses. The two types currently cost the same, but per-user prices will increase 15%, while per-device license prices remain unchanged. Regardless, per-user licensing will generally remain more cost effective in organizations where employees use multiple devices in the course of business.

Licensing Client Access to Server Products

The licensing model employed by most Microsoft server-based products (when used on-premises) involves server-side license(s) for the right to run the software on a server and separate client-side licenses to cover client access to the server software. Client-side licenses typically comprise most of the overall server software licensing expense.

Depending on the server product, client-side licenses come in one of the following forms:

  • Client Access Licenses (CALs) for licensing access to most server OSs and server applications deployed on-premises
  • Client Management Licenses (CMLs) for licensing the management of clients using System Center-branded products running on-premises
  • Subscription Licenses (SLs) for licensing products that rely on computational resources or data residing in Microsoft data centers (specifically Endpoint Protection, which downloads virus signatures).

CALs and CMLs are generally purchased as perpetual licenses, meaning that a customer can continue to use the server software purchased for as long as they want without additional license expense. SLs are subscriptions, meaning that use of the software must stop if the subscription term expires without being renewed. Many CALs and SLs are offered both as a per-user license, which covers an individual user, or as a per-device license, which covers a single device used for access. Similarly, CMLs are also generally offered as a per-user license or as a per-OSE (operating system environment) license covering a single physical OS or virtual machine running on a client device. The per-user and per-device/per-OSE licenses have been priced identically, so customers chose the mode that yielded a lower license count or that was easiest to track for compliance purposes. (Customers can purchase a mix of per-user and per-device/per-OSE licenses for the same product, but to ease management and tracking, Microsoft recommends customers standardize on one or the other.)

A majority of Microsoft's server products are affected by the change in pricing for client licenses. (For the list of affected licenses, see the chart "Licenses Affected by 15% Per-User Price Increase".) While all for-profit organizations licensing server software for on-premises use are affected, academic and charitable institutions are not. Furthermore, software licensed through the Services Provider License Agreement (SPLA), which lets Microsoft partners provide online hosting and management services with Microsoft products, isn't affected.

The 15% price increase for per-user licenses enables Microsoft to monetize the increasing popularity of per-user licensing. In recent years, both personally owned and corporate-owned tablets and smartphones have proliferated, with today's bring-your-own-device (BYOD) trend accelerating the pace. Despite the price increase, per-user will remain the preferred option under most scenarios, with the main exceptions involving customers with shared devices (such as kiosks), common within manufacturing, retail, and healthcare industries.

(In concert with the per-user client-side price increase, Microsoft is also increasing the cost of server-side licenses; see the sidebar "Prices for Some Server-Side Licenses Changing".)

When Customers Are Subject to the Price Change

Exactly when a customer becomes subject to the per-user pricing change for server products depends on the particular circumstance.

Existing licenses covered by Software Assurance (SA). Customers with per-user CALs or CMLs covered by SA are insulated from pricing changes through the end of their current SA terms, regardless of which volume licensing program was used. The same is true for SL subscriptions through the end of the customer's current subscription term. However, on renewal of SA coverage for per-user CALs or CMLs, customers will be subject to the price increase, and the same is generally true for renewal of per-user SLs. SA customers have the right to exchange per-device CALs or per-OSE CMLs into per-user CALs/CMLs at the time SA is renewed; those who exercise this right will see the cost of covering each per-user license with SA rise 15%.

New license purchases. Customers purchasing new per-user licenses for the affected server products through Select, Select Plus, Open Value Non Organization-Wide, or Open License will be subject to the new higher prices beginning Dec. 1, 2012. In contrast, Enterprise Agreements (and in some cases, Open Value Organization-Wide and Open Value Subscription programs) have price protection features, which generally keep prices stable for a few years, through the end of the current agreement. The major caveat is that the customer must have purchased at least one copy of the license prior to the Dec. 1, 2012, pricing change to "lock in" the old price for subsequent purchases.

Resources

Microsoft has not made an official public announcement of the per-user pricing change; news of the change was communicated through Large Account Resellers (LARs).

Examples of LAR announcements are available at www.softwareone.com/en-uk/Events/News/Documents/Microsoft%20CAL%20Update%20FAQ%20from%20SoftwareONE.PDF and www.bytes.co.uk/info/licensing-updates/microsoft-user-cals-price-increase/.

Microsoft's Dec. 2012 price lists will reflect the pricing changes. Spreadsheets containing the U.S. prices for the Open License volume licensing program are available at https://mspartner.microsoft.com/en/us/pages/licensing/price-lists.aspx. The Microsoft License Advisor site at mla.microsoft.com/default.aspx allows customers to look up individual product prices under various volume licensing program and discount-level scenarios.

The right for SA customers to transition between per-user and per-device CALs, or per-user and per-OSE CMLs, is documented in the monthly Product List, available via a link at www.microsoft.com/licensing/about-licensing/product-licensing.aspx#tab=2. Search for the section titled "Client Access Licenses (CALs) and Client Management Licenses (MLs)."

How price protection and other aspects of SA works within the various types of volume licensing programs are covered in "Understanding the Select Plus Licensing Program" on page 11 of the Mar. 2012 Update, "Understanding Open Licensing Programs" on page 17 of the Feb. 2012 Update, and "Understanding the Enterprise Agreement Program" on page 17 of the Sept. 2011 Update.

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