Fee Changes Push LARs to Midmarket

To spur sales of its most profitable volume licensing plans, Enterprise Agreements (EAs), in a tough economy, Microsoft is increasing the fees it pays to Enterprise Software Advisors (ESAs) who help the company sign up midmarket customers for new EAs. However, other fees will go down, resulting in a net decrease in revenue for many ESAs, particularly those managing large customer accounts. The changes put more focus on smaller customers, where EA penetration is much lower than among large accounts, but new licensing programs open to any reseller could limit ESAs’ ability to make headway among those customers.

The Role of an ESA

ESAs are a subset of Microsoft Large Account Resellers (LARs). LARs are the only resellers through which customers can purchase software through Microsoft’s Select and EA volume license plans, which are generally aimed at companies with 250 computers or more. When LARs sell software through Select, they get a margin on the licenses sold. When ESAs sell EAs, they get no margin on licenses, but receive fees for services that help Microsoft and the customer to manage the contract.