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Daryl Ullman



 Dear Friends,

As Microsoft and their shareholders celebrate a stellar earnings report, it’s important to consider what the company is doing to achieve such unprecedented results. Of course, there’s no single factor to consider, but as our blogs have reflected during recent weeks, Microsoft is capitalizing on new market opportunities such as cloud computing and Office 365. Another factor, which is much less visible to the public, is that they are doing whatever they can to maximize revenue from legacy products. They do this by means of software compliance audits. A compliance audit may occur as a “self-assessment” or it may be conducted by a third party which has been appointed by Microsoft. Microsoft may refer to the self-assessment as a way assist the customer with their Software Asset Management (SAM) procedures, but don’t be fooled; it’s an audit. Regardless of who administers it, the customer will be required to purchase licenses to cover any deployed software which exceeds their entitlements, often at higher prices than their typical discount.

It’s worth noting that when Microsoft demands an audit, the customer has little or no influence over the timing, which may prove disruptive to normal business. At Emerset, we recommend that customers proactively evaluate their compliance status and clean-up or true-up as necessary. If your organization doesn’t have the resources or expertise internally, we would welcome an opportunity to discuss your situation and ways in which we can help you become fully compliant. 


Analysis of Microsoft’s® 1st Quarter FY 2018 Earnings Report from a Licensing Perspective


By: Daryl Ullman

Microsoft® reports earnings in three operating segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

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Azure™ Container Instances

Microsoft® has not been subtle about their focus on cloud computing. It wasn’t long ago that the mere notion of surpassing Amazon® (AWS™) or even competing for market share seemed completely unattainable, but the software giant is closing the gap. During the most recent fiscal year, Microsoft reported nearly doubling Azure™ revenue during each quarter (Q1FY17 +116%, Q2 +93%, Q3 +93%, Q4 +97%). 

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Should Software Asset Management be Automated?

Microsoft® has teamed with Flexera™ to provide an automated software asset management solution for their volume licensing customers. This is being presented as a way to “Increase Software Supply Chain Transparency & Strengthen Customer Relationships”, but anyone electing to engage in the offering, which is currently voluntary, should exercise caution, and perhaps consider other options.

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Why are Companies Selecting the Microsoft® Cloud?

Many industry experts believe that cloud computing is still in its infancy, but we’re seeing an increasing number of large organizations abandoning their datacenters and relying upon cloud service providers for many of their IT needs. Even companies in some of the most security conscious and highly regulated industries are increasing their reliance upon the cloud.

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Are You Ready for a Software Audit?

Sometimes I feel like I have posted about software licensing audits too often, but I keep receiving inquiries from (rightfully) concerned organizations who are being audited. Major software providers such as Microsoft®, Oracle®, IBM®, and others have increased their efforts to ensure that their customers are properly licensed and paying for all the software they use. Since virtually all software license agreements include audit rights, this results in minimal cost or effort for the SW vendor. 

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Are you SURE you’re Compliant with AAD?

Azure™ Active Directory (AAD) provides identity validation and access management for Microsoft® hosted products and services such as Azure, Office 365™, Intune and others. Microsoft includes basic AAD functionality with these services at no charge, but they also offer the following enhanced editions, which require users to pay for a Subscription License (SL)

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“Learn it all”

You don’t have to focus on Microsoft® every day to notice that they have dramatically improved their public perception (and stock price) during the past few years. Those who do focus on the software giant tend to attribute it to CEO Satya Nadella, and the way in which he has transformed the company since taking the helm as CEO in February, 2014. When his predecessor, Steve Ballmer, retired, Microsoft had a well-deserved reputation for being a ruthless competitor with a Windows® or nothing business strategy.

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