Part twelve of the series of Top 10 ICT Money Saving Tips for schools, based on my BETT 2010 presentation.
Good news, my counting was hopeless, and my Top 10 tips actually contain 14 Top ICT Money Saving Tips. So there’s more to come after this one

If you don’t spend all of your time obsessing about licensing, then it is pretty easy to decide that it is too complicated (and I’m definitely not just referring to Microsoft licensing!). And amongst all of the licensing detail, it is sometimes a little difficult to see the wood from the trees – or to stop and take a few minutes to work out if a big change to the way you license software would be a good thing or not.

A few years ago I wrote a blog post called “How to get the best on Microsoft Software in Education”, and it has been in the Top 10 posts ever since. It just steps you through the decisions you need to take one by one.

So here’s one key element of it, which is absolutely critical, and especially worth reviewing in the months coming up to a major product release.

Subscribe or buy?

There are two basic ways of buying Microsoft software. One is to buy a perpetual licence, and the other is to buy a subscription licence.

  • 'Perpetual' licences are exactly what they say - you buy them, and keep the licence forever. You are only licensed for the version you have bought. So if you buy a licence for Office 2007, you can't run Office 2010 without buying another licence.

  • 'Subscription' licences are where you pay to use the software for an agreed amount of time, usually a year. Of course, this costs less up-front, but may cost more over a number of years; however it does come with the automatic right to upgrade to newer versions.

For schools, the subscription licence is called either a School Agreement or an SESP agreement, and basically it involves counting up your computers, and then you license all of them for the software you need (often that means Windows upgrades and Office).

So how does a School/SESP Agreement save money?

There’s a number of tricks to thinking about your subscription:

  • If you like to upgrade to the latest versions of software as they are released, your subscription means you can do that without having to buy new licences. And these days, with technology moving so fast, the upgrade cycle is pretty much every 3 years for both Windows and Office

  • If a new release is due shortly (as in the case of Office 2010) a subscription automatically covers you for it. If you buy a perpetual licence for Office 2007 now, you aren’t entitled to upgrade to Office 2010 without buying a new perpetual licence.

  • The School Agreement is based on you counting your computers once a year. If you count them all in March, and then add 100 new computers in April, they are automatically covered without you having to pay more in that year’s subscription. You only have to start paying for them from the next year’s count. (SESP is slightly different, as you have an option to license a number of PCs or a number of users)

  • The annual cost of a subscription is lower than the up-front cost of a perpetual licence. Which means that if you’re budget is being squeezed, you can help reduce this year’s cost, at the same time making next year’s cost predictable.

Let’s say you’re just about to open a new BSF school in March, and you’re going to use this year’s budget to buy 200 Office 2007 Professional Plus licences. You’ll pay about £37 each for the licences under the perpetual Select scheme (Source: Pugh). And if you want to upgrade to Office 2010 in September, you’ll need to buy new licences – which may be another £37 each.

Alternatively, if you’re covering all your computers with a School Agreement, then you’ll pay about £14 each for the licences on subscription (Source: Pugh). And the subscription includes the upgrade to Office 2010. Now, because it’s a subscription, next year, you’ll pay again to continue it. But you can perhaps see that if you’re a frequent upgrader, or there are new versions due, it saves you money if you buy using a subscription agreement.

Over 3 years, you’d pay £42 for Office 2007/2010 Enterprise on a subscription licence (eg School Agreement), or £74 for Office 2007/2010 Professional Plus on a perpetual licence (eg Select Licence). Of course, after 3 years you still have a subscription to pay, which you don't for a perpetual licence, it does reduce your upfront cost, and makes your budget planning more consistent.

The other thing about the subscription schemes is that you automatically receive the Enterprise versions of the software – in the case of Office, that means you get OneNote and Groove (See table). Or in the case of Windows 7, you get the Enterprise version that includes BitLocker Drive Encryption, AppLocker, Windows XP mode and a pile of other things (See table)

To find out if it will save you money, then you should either give your Microsoft Education partner a call (just like I did for the pricing quoted above!), or read more about our licensing on our UK Education website