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User Subscription Licenses: Don’t Buy a Ferrari to Drive to the Grocery Store

Migrating IT services from a legacy platform to the cloud or a Software-as-a-Service (SaaS) model offers significant potential benefits. However, embarking on the journey without careful planning and preparation can lead to unexpected and unpleasant surprises and complications – including increased risk of software audits as well as security issues related to data location.

User Subscription Licenses (USLs) are another area that deserve careful attention.  Customers purchase USLs according to different customer profiles or user personas designed to align with a wide range of functional categories.  For example, an “administrative” worker would have a license with a certain set of capabilities, while functions such as “financial analyst” or “technology specialist” would receive licenses aligned with their requirements.

The trick is to get the alignment right, and that can be a challenge. Software vendors put a great deal of thought into defining user categories in a way that encourages buyers to purchase licenses with extra features, aka higher margin.  However, aligning USLs with user personas is a new and challenging process, and most customers don’t get it right the first time. But when they discover after the fact that they really don’t need the extra features of the deluxe version, they also discover that they can’t downgrade the licenses they’ve already bought.

The takeaway: if you’re negotiating a SaaS solution that includes multiple USL types, insist on retaining the right to adjust allocations with no penalty.  Otherwise you may end up paying for way more functionality than you need.

About the author

Louis joined the team in early 2014 after nearly 20 years with Microsoft Corporation. Louis has compiled a track record of Enterprise client success underpinned by customer focus, strategic thinking, organizational agility, problem-solving acumen and impactful knowledge transfer which has established his reputation as a Microsoft licensing expert.