One question that we get over and over from Enterprise customers and U.S. Government Agencies is: “Should I rent or buy my Microsoft product licenses in a cloud-based solution.” As always the short answer is: “BUY THEM.”
The context for this question is whether customers should be renting their licensers from us as part of a cloud-based Microsoft Project, SharePoint or CRM solution that we deliver, or can they and should they purchase their licenses directly from Microsoft. Generally speaking, when you look at the return on investment over a period of time, it’s just more cost-effective for larger organizations to buy (purchase) their own product licenses/CALS than to rent them from us. “Rent” in this case means we include the license fee in the overall monthly service fee.
Let’s take a specific example, say a 500-user Project Server 2013 deployment that includes SharePoint and SQL. The difference in the monthly hosting fees with and without rental license fees can vary from $33/user/month to $8.50/user/month. Depending on the details of a customer’s licensing agreement with Microsoft, the breakeven point for purchasing licenses from Microsoft over renting them from us is somewhere between 12 to 18 months.
Many of our Enterprise customers (where Enterprises are defined as Global 2000, Fortune 500 or Fortune 100 organizations) purchase their licenses, while some have a mix of purchased and/or rented. What’s interesting is that enterprises that rent licenses tend to do so more often in the initial phases of a cloud deployment. After they are assured that their deployment meets their expectations and user adoption picks up, they switch to purchasing licenses as they move into a full scale deployment.
If you’d like to experiment with understanding cost differentials, try our online pricing configurator for Project Server, SharePoint and CRM buy clicking “rent” versus “purchase” radio buttons and compare the differences. www.projecthosts.com/pricing