Sunday 15 May 2016

Microsoft starts the 'race to the cloud' for EDU.

Microsoft has fired the gun on the “race to the cloud” by altering the way it licences its products to education in the UK.

The broad strategy was outlined in a policy document issued in January but the fine details are only just becoming clear.

For the last twelve years schools have been licensed through schemes as OVS-ES or EES. These heavily discounted concessions have encouraged IT administrators to install local server software such as file and print, SQL Server, Exchange, Hyper-V, SMS and Remote Desktop at a fraction of the price paid by business users. Unsurprisingly this strategy has been hugely successful and has resulted in the majority of UK schools being completely dependant on Microsoft products for both teaching and administration.

Unfortunately Microsoft has become a victim of it own success because as Redmond attempts to persuade education to adopt Office365 and Azure the on premise licencing discounts are acting as a massive disincentive.

Although schools might consider moving to the public cloud the agreements they are holding with Microsoft are currently delivering all the services they require and are already budgeted for. So as exciting as the cloud might seem most schools have decided to stay put and take advantage of Microsoft’s generosity.

Which is fine except they can’t anymore. Well not without finding a lot more money.

This is because over the next two years Microsoft are phasing out the licencing discounts for on premise software to encourage schools to look to the cloud.

The existing allowances will be withdrawn after July 1st 2018 and replaced with ‘something else’ and although Microsoft are guaranteeing a continued academic discount it will not be as generous. Some sources have hinted that the costs are likely to increase by about 20% for all on-premise licensing to bring the UK in line with other European educational schemes.

For schools starting a new agreement the increase will be phased in. From July 1st 2016 discounts will be reduced to approximately half their current level and further reduced to one quarter after July 1st 2017.

Schools renewing an agreement will be unaffected by the changes up until July 1st 2018 after which they will be presented with the new pricing structure, whatever that might be.

The idea is to place a premium on locally installed software in order to make Office365/Azure appear as a cost saving option.  It’s a classic carrot and stick approach.

The carrot is quite attractive and will include new offerings for Office365 such as Classroom, Forms, OneNote and cloud PABX.  Microsoft are also making concessions to allow the direct transfer of some existing licensing to Azure and will offer Azure AD Domain Services to reduce the dependency on local hardware.

The message from Redmond is clear.

Microsoft is encouraging schools to move to public cloud and is signalling a clear timescale for the transition. The local server option still exists but it will cost you more and going forward and if you want features such as Classroom you need to be using Office365.

For new schools the most efficient licencing strategy will be a cloud first approach. The principal platform will be Office365 backed by Azure with local servers only employed for specific roles.

The good news is that although there are many technical and governance issues to be resolved, education has been given two years to sort it out.

On your marks….

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