The Enterprise Agreement: What is it?

It can’t have escaped your notice that IT environments are becoming increasingly complex. Digital transformation, a growing ecosystem of devices, and rapidly changing business needs means it’s becoming progressively more difficult to administer and manage the growing number of software licenses that are needed to support the business.

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8th July 2022

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The Enterprise Agreement: What is it?

It can’t have escaped your notice that IT environments are becoming increasingly complex. Digital transformation, a growing ecosystem of devices, and rapidly changing business needs means it’s becoming progressively more difficult to administer and manage the growing number of software licenses that are needed to support the business.

In response, many big-name software vendors have created agreements that offer a more streamlined and flexible way for customers to purchase their software.

Known as enterprise license agreements (ELAs), these programmes typically offer customers discounted or fixed pricing for lump sum purchases, a simplified procurement path, and a single agreement for ease of purchasing.

ELA issues

Problem is, not all ELAs are created equal, and this can create some significant pain points for IT leaders at companies large and small. For a start, often the number of licenses have to be agreed upon at the time of signing, something that many organisations can struggle to predict. Throughout the year, vendors then monitor actual usage against these agreed limits, and this can result in punitively high retrospective fees for any over usage. As a result, IT teams find they need to expend a lot of extra time and management effort simply keeping tabs on what is being used and where.

As well as finding ELAs tedious to maintain, many IT leaders find ELAs can prove wasteful if predicted consumption limits are never approached – and unexpectedly costly if these are surpassed. Plus, the contract language used in many agreements can be less than transparent. All of which can leave customers between a rock and a hard place if they need to challenge software deployment definitions, substitute credits to purchase and consume other software, or assert their rights to audit and verify their actual usage.

None of this is helpful for today’s CIOs and IT managers, as they strive to manage their increasingly complex hybrid IT environments. Rather than juggling contracts that expire at different times, they need software they can purchase when they want, deploy how and when they need, and easily keep up-to-date.

Cisco steps in to make life simpler

Cisco decided it was time to provide customers with a newer approach to software licensing that would make things easier and change how they purchase, deploy and adopt Cisco technologies.

The Cisco Enterprise Agreement (EA) is a simplified ELA that offers more predictable budget management, with no surprises. Enabling organisations to buy, consume and manage Cisco technology across a variety of technology domains – including Cisco DNA, Cisco Collaboration, Cisco Data Centre and the Cisco Security Platform – customers can opt for a 3- or 5-year cross platform agreement with unified terms and conditions.

Let’s take a look at some of the key benefits this approach provides:

  • Customers can choose a single suite or a combination of software suites and get a single agreement for all selected products and services. It’s a unified approach to software licensing that eliminates a lot of licensing related management tasks.
  • Customers can deploy and consume software in the manner that best fits their needs – on premises, in the cloud or a hybrid model. Customers can also add software suites to their Cisco EA contract as needed and transfer licenses from existing hardware to new hardware.
  • An online portal gives IT teams a single enterprise-wide view of what software has been purchased, deployed, and is up for renewal, providing ‘at a glance visibility’ of where they stand right now.
  • A 20% growth allowance and a unique ‘True Forward’ provision means customers can accommodate unforeseen growth without purchasing more. There’s no retroactive billing for over-usage, instead their contracts are revised at the beginning of their next billing period.
  • The nett price of any additional licenses that may be needed beyond the 20% ‘growth allowance’ is fixed at the point of agreement signing and is applicable for the term of the agreement. This helps with future budgeting and negates the risk of license price rises during the term of the contract. Plus, Cisco’s unique value-share approach ensures that, at the True Forward date, customers can offset the remaining cost of any licenses on decommissioned equipment against the True Forward charge for any additional licenses consumed during that 12-month period.
  • Customers get instant access to new software when they need it, that includes accessing new software capabilities as these are added to the Cisco technology suites.

Rethinking with ease and growth in mind

According to a recent study by the Enterprise Strategy Group, the Cisco EA not only lowers the cost per license. It also reduces the licensing manpower needed to undertake licensing-related tasks by 70%, freeing up valuable time and resources to focus on more strategic tasks. Plus, licensing portability makes it faster and easier to move software to a new device without repurchasing licenses.

If this all sounds a bit complicated, don’t worry because we’ll be on hand to help define the best Cisco EA for your needs. Over the years, we’ve gained extensive know-how in this arena and are our specialists are expert at helping organisations navigate the intricacies of Cisco licensing.

If you’d like to find out more about Cisco EA, you can click here to download our helpful datasheet. Alternatively, why not get in touch and we’ll be happy to advise you on the best path forward.


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