The importance of Understanding Microsoft Product Terms for FinOps Teams
Microsoft Product Terms are the primary source for all the terms and conditions associated with software and online services available through Microsoft commercial licensing programs. Product terms are updated monthly for software and online services via a single online resource as of the 1st of February 2021.
Before the launch of this single online resource, Microsoft documented software and online service terms using two separate and lengthy Word documents. Updates to these documents took place monthly or on a less frequent basis depending on the rate of change. You can still access these legacy documents here, dating back years where there is a requirement to validate older or legacy licensing terms.
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The Version 1 Software Asset Management (SAM) team published a blog and short video that digests Microsoft product term updates each month.
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Track and validate Microsoft Product Terms Changes for FinOps Benefit
It’s my impression that those customers who don’t proactively monitor changes, often only become aware of alterations in Microsoft terms and conditions once they’ve already caused significant effects.
Additionally, with an increased focus on cloud cost optimisation, there’s an ever-growing risk that FinOps teams (while concentrating on cloud cost savings through reconfiguration and enhanced lifecycle management) might neglect the need for sufficiently trained personnel who can comprehend intricate Microsoft product terms.
Both situations can result in you unintentionally violating Microsoft licensing terms or overlooking opportunities for cost reduction.
Having proficient Microsoft licensing experts who can track and validate the impact of Microsoft Product Terms can help address FinOps team capability shortfalls, such as:
― Understanding license entitlement owned for on-premises equivalents.
― Costs associated with on-premises software licenses.
― BYOL pathways including any associated risks and benefits.
― Licensing cost implications associated with moving on-premises workloads to the cloud.
― Where there is a need to seek amendments or clarifications as part of Microsoft contract renewals and negotiations.
Addressing Compliance Risks
Microsoft still incorporates trust or honour-based licensing scenarios in their cloud for specific situations. Understanding how to navigate and interpret Microsoft’s product terms can empower FinOps teams to proactively address risks that carry financial and operational implications. For instance, if your organisation is excessively leveraging Azure Hybrid Benefit and is found non-compliant during a Microsoft audit, you could be required to purchase licenses to retrospectively cover the benefit and compensate for unauthorised Azure-related discounts received over multiple years. This alone could significantly impact your budget by generating unforeseen cloud expenses and resulting in reputational damage.
Conversely, the opposite is also possible: when FinOps teams lack visibility into on-premises licenses that might encompass rights capable of ultimately lowering cloud consumption costs.
In Summary
In the grand tapestry of Microsoft technology management, Microsoft Product Terms form a crucial thread that weaves together compliance, cost management, and innovation. Understanding Microsoft Product Terms and their implications transcends a mere technicality — it becomes a strategic imperative for customers seeking to navigate the complex landscape of licensing, optimise costs, and ensure compliance while harnessing the full potential of Microsoft’s offerings.
As Microsoft license experts, we can help you demystify Microsoft product changes and clarify what this could mean for your on-premises and cloud compliance position, to avoid and reduce cost and risk.
If you have any questions relating to this or any other Microsoft licensing matter, please go to our website or contact us.
