Much to the delight of its customers, leading collaboration and communication brand, Cisco, recently decided to expand its enterprise licensing agreement to feature collaboration software and security technologies. Today, the minimum contract value required to be eligible for a Cisco enterprise agreement is only $250,000 (or about £200,000).
Previously, the Cisco One licensing program which allowed IT groups to transfer licenses between products could only be used with data infrastructure and networking products. However, now that Cisco is offering the same concept throughout the complete product portfolio, the vendor believes that enterprise customers will begin to upgrade their legacy products even faster.
According to the Vice President for digitisation, Mark Hill, the company is hoping to expand the number of companies taking advantage of ELAs for 3 to 5 years, and therefore boost the amount of revenue Cisco generates.
Why the Desire for More Revenue?
All businesses want to make as much money as possible, but Cisco is particularly keen to make a change, as the company wants to be seen by its investors as a more software-based company. When a new piece of hardware is purchased, the license for the software is usually attached to a certain piece of hardware. However, by allowing companies to apply their existing license for software to various hardware, Cisco hopes that companies will begin to upgrade hardware more frequently.
This approach also means that Cisco will enjoy the added benefit of making it more difficult for competitors to take customers from the company's existing installed base. After all, sticking with Cisco will be cheaper.
