Licensing remains a topic that no one claims to like yet everyone keeps on talking about. October 2019 saw what was undoubtedly the biggest number of changes to Microsoft Business Applications SKUs (i.e. items that MS sells), with the end of Dynamics 365 Plan licenses and new models for licensing PowerApps & Flow. Not to mention the new structure that ties licenses closely to API call limits. Oh, and we’re still waiting for the new restricted entities definition that should have gone along with October 1st licensing terms.
We’re not even past the month of October and there’s already a new licensing discussion heating up in the MS customer and partner community. The announcement of Self-service purchase capabilities for Power Platform products, made via Microsoft 365 Messaging Center (only visible to admins), seems to have pretty much angered everyone who saw it.
I gotta say, you simply could not find a worse channel to announce something like this, because it’s aimed squarely at getting around a problem that IT administration (and sometimes consultants like me) are a part of. But like we’ve seen so many times before, communication isn’t exactly the strongest part of Microsoft’s software licensing management efforts, so let’s just move on and start analyzing what is happening here, why it is happening and what possible outcomes there might be from it.
Empowering every individual to acquire applications
To get an overview of what exactly is going on, you can read the article from Mary Jo Foley: “Microsoft to enable end users to buy Power Platform licenses without administrative approval”. In short, starting in November 2019 (in the US), any user that has an account in your organization’s Azure AD tenant will be able to go and buy Power BI licenses directly from MS. Later this will expand to PowerApps & Flow, and other regions. Essentially this will be an “insert your credit card here to unlock Power Platform functionality” type of experience.
How is this different from any of the popular SaaS products from other vendors then? It isn’t. That’s the model that every consumer app and most business apps support, since it represents the lowest barrier to entering a commercial relationship. Usually you would start with a free trial period to try out the capabilities of the SaaS product. If it’s a good fit for the problem you’re trying to solve, the next problem you face is the procurement of the app. Buying things for personal use is easy, whereas the bigger the organization you’re working in is, the longer you can expect this purchasing stage to be. During it you’re basically standing behind the store window, staring at the product you know you’d really need, yet the door to the store is being kept shut. Often there’s even no opening hours sign to give you any clue on how long this will take (or if you’ll ever get what you wanted).
In such a scenario, it’s not uncommon for problems to get solved with a credit card and an expense claim. The ease of taking this route is how Shadow IT came to be, and I bet we’re just going to see more & more of this Bring Your Own App (BYOA) activity in organizations as the information workers become more savvy about what’s actually out there in the cloud. If one store is closed, there are tens of other options with 24H service.
But they can’t do this! They’re MICROSOFT!!!
It’s one thing being an enterprise software startup and trying to get onto the radar of potential customers via the Bring Your Own App strategy. When you’re Microsoft, though, the expectation is that things work in a completely different way. Since pretty much every bigger company is a MSFT customer, the licensing game has been a process of long negotiations and complex agreements. This is the procurement norm of how Microsoft software finds its way into the hands of the end users. Well, it sometimes does, and other times it doesn’t, because the needs of individual users may get lost in the big corporate IT machine that’s trying their best to keep things under control, with the growing amount of regulations, systems and requirements.
What’s Microsoft on about here with self-service purchases, specifically with this chosen set of products? Imagine you’re the world’s most valuable company, you happen to be producing software & you’ve recently discovered a huge new market in the Low-code Application Platform space. You’ve built up a strong community of advocates (or addicts even) and your target is to empower the next 10 million application developers to digitally transform their organizations with the help of your global cloud infrastructure and AI driven insights. You’ve got all these key buzzwords lined up, there’s a seemingly endless sea of citizen developer opportunity ahead of you. The only thing standing in the way of your success is this nasty thing that looks like Niagara Falls, sucking in many of the smaller boats that the poor citizens attempt to use to sail to this promised land of Power Platform. That thing has a name and it’s called Enterprise Software Licensing Models. So much for the “no cliffs” experience then – hope you packed a life vest on this journey!
To avoid this vortex that Microsoft themselves have largely caused over the past decades with the swirls of their enterprise software sales strategies, it makes perfect business sense to open up new, alternative routes for those power users who seek to merely use the software tools – instead of catering only to those who are tasked with managing the whole lifecycle of IT tools in the organization.
There’s only so much you can do with the PowerApps and Flow features bundled into Office 365 subscriptions, after which you’ll need a premium plan. Why on earth would Microsoft willingly push the users to look for alternative tools like Zapier or IFTTT to automate processes that connect to data sources that are outside Office 365? Why shouldn’t it be possible to enter the very same credit card details into a form provided by MS, to keep the tools within the same MS cloud that’s already used by the organization? Isn’t this actually a way to reduce the problems resulting from Shadow IT? Keep the rogue users closer to the official IT world and you’ll have a better chance of converting the tools into non-shadow status at some point.
Obviously there are some valid concerns with a model that might encourage users to acquire MS software via an alternative channel than the officially sanctioned one. The self-service shop won’t give the same negotiated prices for licenses as the company wide agreements. Handling the expenses from various different sources will be an overhead. The boundaries between supported and unsupported IT will become blurry. Even with the promised central visibility into who’s bought what licenses in the tenant, initially it will all just look like more work to those persons who have traditionally managed Microsoft licenses in the organization. There’s an FAQ document from MS for this self-service purchase model that attempts to address some of these concerns, but with a change like this there’s bound to be far more Q’s than A’s at this point.
There shouldn’t be a need for the self-service purchase channel to exist, but in reality there is. If you have only spent time working in roles that represent the centrally planned deployment of IT systems, you may not realize the challenges that can stand in the way of you and the software license you would need for getting your job done in a larger organization. Sure, there might be a theoretical process in place for how the needs of business users are identified and then eventually turned into a working piece of software that everyone happily uses. In reality a fair share of the people on the business side who live in the world of needs may not be seeing such processes in action. They may well be unaware of any development initiatives on the IT side, nor have contacts with those professionals that could help them navigate these processes. If IT systems can be complex, then the inner workings of an enterprise organization can represent a whole new dimension of complexity. No one is at fault, yet everyone pays the price.[Read more…]