January 14th 2020. A date many will be familiar with as it marks the end of life for Windows 7 support. 10 years of product support has been provided for Windows 7 since Microsoft released it in October 2009. Organisations who still have Windows 7 deployments face two options – upgrade to Windows 10 before January 2020 or face support costs for devices still running Windows 7. Any other scenario would mean facing the risk and vulnerability of an unsupported environment with no technical assistance or software updates.

Now Microsoft have introduced a third option for consideration with its recent announcement of Windows 7 ESU 2020 licenses granted for Users who are licensed with an eligible E5 license.

“Any user licensed with Windows E5, M365 E5 or M365 E5 Security SL’s purchased through an Enterprise Agreement or Enterprise Subscription Agreement as of December 31 2019, may use up to five simultaneous devices to run a local OSE covered by Windows 7 ESU for 2020 or access virtual OSEs covered by Windows 7 ESU for 2020 without the need for a Windows 7 ESU license. “

It then continues: “Customer may acquire Windows 7 ESU 2021 & 2022 and Windows 7 ESU 2021 & 2022 for Microsoft 365 licenses for such devices without the need to acquire the 2020 ESU license if the devices were used solely by Qualified Users for the duration of the ESU 2020 coverage period.”

This is a clever and attractive way to incentivize companies to upgrade as quickly as possible to the highest Edition of Windows.
We had a closer look at this offer and what it may mean for companies depending on where they are today and what their strategy for Windows Client OS may be.

What was available until today?
The model in place for ESU for Windows 7 is as follows (further referred to as “standard” model)

Should a company decide to start paying for ESU only in 2021 the fees for 2020 would also have to be paid on top regardless.

The fees are per Device Fees, not per-User Fees which is important when looking at the offer.*

Review of the Offer:

It requires a client to purchase Windows E5 (standalone, by stepping up from E3 to E5 or through the bundles that include Win E5 such as M365 E5 or Microsoft E5 Security) – The licenses must have been purchased by 31st of December 2019.

Since the above mentioned products are licensed per user (up to 5 devices / user) the offer applies to the 5 covered devices / user equally – this is a big difference to the standalone ESU offering which is a per – Device license only.

Users covered with Win E5 will get the first year of ESU Support for “free” as part of the E5 Subscription. This first year is referred to as ESU 2020

What the E5 users do not get?

ESU 2021 and ESU 2022 will incur a cost as per the costs discussed above –this means that if a user with E5 was to still use Windows 7 in 2021 there would be a support cost attached to that for each of the devices in question – other than in the traditional model, the costs for 2020 would however be waived.

What does it mean in terms of pricing?

There are a large number of scenarios that can be priced up and the TCO will depend on whether a company is currently paying for Windows Software Assurance / Subscription , what the target Edition of Windows should be (Pro, E3 or E5) and by when the upgrade is completed (2020, 2021, 2022)

We are looking at a few scenarios with the following assumptions:

The costs of Windows E5 is approximately double the costs of Windows E3, we make the assumption of an annual step-up cost between the two of $ 84.

A – If you are currently paying for E3:

Comparing the $84 * * vs. the $ 25 (Y1), $ 50 (Y2) and $ 100 (Y3) suggests that if a client has no requirement for E5 features and is paying for Software Assurance to date, the E5 offer may be attractive only if there is a break-even due to the per-device costs associated in the “standard” model. Other than that it may make sense in the following scenario’s:

  • If you are planning to take up E5 and upgrade in 2020 then the E5 offer may be attractive.
  • If you are planning to roll-out E5 / upgrade after 2020 then consider buying ESU and stepping up to E5 when required.

B – If you are not paying for E3

  • If you plan to stay with an OEM / Pro Edition consider buying the ESU only
  • if you require E3 features take the E3 + ESU Option

C – If you are paying for E5 already  

  • upgrade as quickly as possible and you are getting ESU for free for 2020.

All of the above will depend on your contracted pricing – if you are an Enterprise Agreement customer your costs for E3 and the E5 step-up may be lower and may for example make it more favorable to buy E3 + ESU rather than purchasing ESU only.

Conclusion

It comes as no big surprise and is somewhat revealing that Microsoft has bundled in the Windows support costs to their premium E5 offering as this is the direction of travel they want to steer organisations to. Equally, with a significant shift in the technology landscape, there is only so much time, Microsoft can continue to support older products for.

This offer provides some commercial merits if the benefits of the additional functionality of E5 are of value to a company and if the move away from Windows 7 is planned to be completed in 2020. As with all these feature-enhanced offerings, the value however is only realized by deploying the technology so the internal rollout roadmap has to be taken into consideration when making a decision.

As part of our License Consulting Engagements we run workshops with technical and business stakeholders to map out roll-out plans to technology / licensing requirements. If this is something of interest, please do not hesitate to contact us on microsoft@cloud-optics.com

 

 

*/** these are generally reported prices for Windows ESU, Windows E3 and Windows E5, the step-up is derived, your actual price will depend based on contract type, currency , etc.

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