Enterprise Licensing Agreements Grow More Appealing with Cisco

Firms can now enjoy a more flexible license

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Cisco ELA
Unified Communications

Published: July 18, 2017

Rebekah Carter - Writer

Rebekah Carter

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.

The Benefits to Customers

One of the most significant immediate benefits that customers can expect to see from this change may be in how Cisco handles customers who have exceeded their enterprise licensing agreement terms. Rather than retroactively billing their customers for exceeding terms, Cisco will be using a “True Forward” approach that resets the terms of the licensing agreement from a specific point in time, based on the amount of usage required.

This new approach, which will be used for any organisation that over-reaches on usage by more than 20%, offers a much friendlier solution for customers when verifying ELA terms. It also means that it’s easier for customers to predict necessary budgets, which could make them more willing to take part in readiness assessments.

Additionally, more customers are new relying on monthly subscription programs to pay for their IT infrastructure. As the terms and conditions of ELA change, solution providers must have the meals to finance the correct deals. Cisco’s new flexibility should help to contribute to its ongoing success in the market space.

 

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