Microsoft Senior Sales Excellence Manager - Eric Ligman

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The “break-even” point of Open Value Subscription

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The “break-even” point of Open Value Subscription

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Since shortly after the initial announcement of the upcoming launch of Open Value Subscription, there have been some questions around the “break-even” point of Open Value Subscription. What I mean by that is, when comparing Open Value Subscription to the other Volume Licensing programs, Open Value Subscription is clearly the lowest initial cost based on the subscription pricing model; however, once you get to year 4 of the agreements, the cost of your annual Software Assurance only renewal through programs like Open Value and Open Value Company-wide are actually lower on an annual basis than the yearly price of Open Value Subscription. So, how long do the initial savings of Open Value Subscription and low annual costs keep you “ahead of the game” financially and at what point do you reach a time where the costs even out?

There has been speculation by some on where that point is and some have even made very short-term predictions on when that might be. Now that the Open Value Subscription price list is available through Distribution, I decided to run the actual numbers to see. I think you will be pleasantly surprised with what they show. Let’s look at Microsoft Office Professional + as an example.

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As you can see by the chart (click chart for full-size), Open Value Subscription clearly provides the lowest up-front costs compared to all of the programs, with Open Business being by far the most expensive. As you progress through the years, the total spend starts to come closer together until finally the total costs between Open Value Company-wide and Open Value Subscription meet in Year 9. Then Open Value Subscription and Open Value non Company-wide meet in Year 12.

What this shows is, your financial outlay per desktop through Open Value Subscription is lower than any of the other programs for 9-12 years (depending on which Volume Licensing Program you choose) for Office Professional Plus. The numbers vary slightly from product to product; however, the per desktop savings of Open Value Subscription is definitely something that Small and Mid-size businesses can use to help them save money when adopting technology to get the most from their IT budgets.

NOTE: The chart above does NOT take into account any Up-to-date discounts, Platform discounts (such as Small Business Desktop or Desktop Professional), or rebate programs, so the savings through the Open Value Subscription Program could be even higher than depicted if you qualify for any of these additional savings options. For instance, the Up-to-date discount alone could reduce the cost of Open Value Subscription by up to 50%, which would vastly increase the time savings of Open Value Subscription compared to the other programs.

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UPDATE:
As of October, 2008, platform options (such as the Small Business Desktop Advantage) are now handled through the “Build Your Own Platform” model.  Here is the post that explains this new option for you.
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Thank you and have a wonderful day,

Eric Ligman
Microsoft US Senior Manager
Small Business Community Engagement
This posting is provided "AS IS" with no warranties, and confers no rights

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  • There is an interesting post over at blogs.msdn.com

  • Just under eight weeks ago, my “ Big news: Open Value Subscription launching in the U.S. and Canada!

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