Microsoft Enterprise Agreement vs Open Value
- Microsoft Enterprise Agreement:
- For large organizations (500+ users/devices).
- Upfront payment, significant cost savings for large-scale deployments.
- Simplifies license management and is flexible when adding/adjusting services.
- Microsoft Open Value:
- Suited for small to mid-sized businesses (5+ desktop PCs).
- Annual payments over three years, predictable IT budget management.
- Includes Software Assurance, focusing on value-added services.
Microsoft Enterprise Agreement vs Open Value: Which Licensing Model Fits Your Business?
Choosing the right licensing model is critical for organizations looking to efficiently manage their Microsoft software investments. Two popular licensing options from Microsoft are the Microsoft Enterprise Agreement (EA) and the Microsoft Open Value Agreement.
These agreements serve different types of organizations with unique needs, so it is important to understand each one’s advantages, limitations, and use cases.
This article compares Microsoft EA and Open Value in-depth, discussing their key features, pricing structures, flexibility, and suitability for different business scenarios.
Explore what best suits your organization’s size, budget, and IT requirements.
Understanding Microsoft Enterprise Agreement (EA)
The Microsoft Enterprise Agreement is designed for large organizations with 500 or more users or devices.
Microsoft EA offers a three-year licensing arrangement that allows companies to license Microsoft products at discounted rates based on volume purchasing. It is targeted at enterprises needing a standardized licensing approach across their entire workforce.
Key Features of Microsoft EA:
- Three-Year Agreement: EA offers a three-year contract with predictable pricing throughout the term, making budgeting easier for large enterprises.
- Volume Discounts: EA gives substantial volume discounts, allowing organizations with large numbers of users to save on software licensing costs.
- Annual True-Up Process: EA provides flexibility to add more licenses as needed through an annual True-Up, where organizations pay for additional licenses added during the year.
- Software Assurance (SA) is included by default in EA and offers numerous value-added benefits, such as product upgrades, training vouchers, and support services.
- Centralized License Management: EA centralizes license management with a single agreement, simplifying compliance, renewals, and tracking for IT teams.
Microsoft Open Value Agreement
The Microsoft Open Value Agreement is designed for small to medium-sized businesses that need a flexible licensing arrangement without the large-scale commitments of an EA.
It provides a simpler way to purchase Microsoft products, with options to spread payments over several years and add licenses as needed.
Key Features of Open Value:
- Three-Year Commitment with Annual Payments: Open Value offers a three-year agreement but allows payments to be made annually, giving organizations flexibility in managing budgets.
- No Minimum Users/Devices: Open Value does not require a minimum number of users or devices, making it suitable for smaller organizations that don’t meet the 500-user threshold.
- Software Assurance as an Option: Organizations can include Software Assurance, adding flexibility based on their support and upgrade needs.
- Perpetual Licensing: Licenses purchased through Open Value are perpetual, meaning organizations own them forever, even after the agreement ends.
- Local License Flexibility: Open Value agreements can be tailored to cover multiple affiliates under a single umbrella while still allowing local flexibility, making it appealing for distributed or growing companies.
Comparison Table: Microsoft EA vs Open Value
To make the differences between Microsoft EA and Open Value clearer, here’s a side-by-side comparison:
| Feature | Microsoft EA | Microsoft Open Value |
|---|---|---|
| Commitment Length | 3 years | 3 years |
| Minimum Users/Devices | 500+ | No minimum |
| Payment Structure | Annual or upfront | Annual payments |
| Software Assurance | Included by default | Optional |
| License Ownership | Subscription with optional perpetual | Perpetual |
| Ideal Customer Size | Large enterprises (500+ users) | Small to medium organizations |
| Cloud Integration | Strong focus on Microsoft 365 and Azure | Optional |
When to Choose Microsoft Enterprise Agreement (EA)
Microsoft EA is most suitable for large organizations, has predictable growth, and requires a comprehensive, centralized approach to licensing.
Advantages of Microsoft EA
- Volume Discounts: The EA provides significant cost savings through volume pricing, making it ideal for companies with many users or devices. For example, a company with 1,000 employees can benefit from EA pricing compared to individual license purchases.
- Predictable Licensing Costs: Organizations can accurately plan and budget their software expenses and avoid unexpected cost increases with a three-year commitment.
- Comprehensive Software Assurance Benefits: EA includes Software Assurance, which offers training, 24/7 support, planning services, and product upgrades. These benefits are especially useful for large organizations that must keep their IT teams skilled and updated.
- Annual True-Up Process: The EA’s True-Up process allows organizations to add licenses to accommodate growth, ensuring that companies remain compliant while scaling up.
- Centralized Management: The EA allows all licenses to be managed under one agreement, significantly reducing administrative overhead. This is especially useful for large organizations with multiple departments that need standardized tools and services.
Examples of Organizations That Benefit from EA
- Large Enterprises: Multinational corporations, including those in banking, retail, or manufacturing, often choose EA for its centralized management and volume discount benefits.
- Public Sector: Governments and educational institutions with extensive software needs and numerous users often benefit from EA’s consistent pricing, volume savings, and Software Assurance perks.
Read about Microsoft SCE Enrollment.
When to Choose Microsoft Open Value
The Open Value Agreement is better suited for small to medium-sized businesses that need flexibility without committing to large upfront costs or a minimum number of users.
Advantages of Open Value
- Perpetual Licensing: Unlike EA’s subscription-based model, Open Value licenses are perpetual, meaning they belong to your organization indefinitely. This can be advantageous if your business prefers to avoid the recurring costs associated with subscriptions.
- Budget Flexibility: The three-year term is accompanied by annual payments, which can ease budget pressures. Open Value allows businesses to spread payments, making cash flow more manageable.
- No Minimum Requirements: Open Value does not have minimum user or device requirements, making It ideal for small businesses or organizations in the early stages of scaling.
- Customizable Software Assurance: Software Assurance is optional, meaning businesses can decide whether to add SA on a product-by-product basis, allowing them to save on support and upgrade costs if those services are not needed.
- Local and Affiliate Flexibility: Open Value is a great option for organizations with multiple branches or affiliates that need some degree of customization while maintaining central oversight of licensing.
Examples of Organizations That Benefit from Open Value
- Small Businesses: Companies with fewer than 500 users that need flexibility in their software purchases and prefer perpetual licensing often choose Open Value.
- Growing Startups: Startups looking for a flexible licensing model that allows them to control budgeting without committing to a large-scale contract appreciate Open Value’s pay-as-you-go nature.
Cost Considerations: Microsoft EA vs Open Value
The cost structure and financial impacts are important considerations when comparing Microsoft EA and Open Value.
- EA Cost Model: The EA offers substantial cost savings through volume discounts, which benefit large organizations with many licenses. The annual True-Up also provides flexibility, as you can adjust licensing based on yearly usage. However, the costs can be higher if you do not need such a large volume of licenses.
- Open Value Cost Model: Open Value uses a more flexible payment model, allowing organizations to spread their licensing costs over three years through annual payments. It is generally more budget-friendly for small—to mid-sized businesses, particularly those that do not meet the user minimum required for EA.
EA often offers better value for organizations that require a significant number of licenses due to the discounts provided for bulk purchases. On the other hand, Open Value may prove more cost-effective for smaller organizations that need to control expenses and prefer perpetual licenses.
Software Assurance: A Key Differentiator
Software Assurance (SA) plays a significant role in the decision-making process between EA and Open Value:
- EA Software Assurance: Included by default, SA in EA gives organizations access to product upgrades, 24/7 support, training services, and deployment planning. Its all-inclusive nature means that companies get immediate access to upgrades whenever a new version is released, helping them stay on the cutting edge of technology.
- Open Value Software Assurance allows organizations to add Software Assurance selectively. Businesses can pick which licenses will include SA, reducing costs for products that do not require frequent upgrades or support services. This flexibility allows small businesses to customize their support needs and control spending.
For organizations that value ongoing support, upgrades, and additional services, EA with Software Assurance is the better choice. On the other hand, Open Value allows smaller companies to choose when and where to spend their money on support and upgrade options, offering greater control over their IT budget.
Read our comparison article Microsoft EA vs Select Plus.
Flexibility and Long-Term Commitments
Flexibility and commitment terms are critical differences between EA and Open Value:
- EA Flexibility: EA requires a three-year commitment and a minimum number of users or devices, making it less flexible than Open Value. However, it offers the True-Up feature, allowing businesses to adjust their license count annually, providing flexibility as the company scales.
- Open Value Flexibility: Open Value provides more flexibility, especially for smaller companies. Without minimum user requirements and with annual payments, businesses can purchase what they need when they need it, avoiding long-term obligations. This flexibility is ideal for organizations that may experience variable growth or contraction.
Cloud Integration: EA vs Open Value
Microsoft is increasingly focusing on cloud services, and both EA and Open Value have pathways to integrate with the cloud, but the scope and approach vary:
- EA and Cloud Integration: EA is heavily focused on Microsoft 365 and Azure, making it an excellent choice for organizations looking to migrate or integrate their infrastructure with the cloud. EA customers benefit from cloud-specific incentives, such as Azure Hybrid Benefit, which allows existing licenses to be used for cloud resources, reducing the overall cost.
- Open Value and Cloud Integration: Open Value also supports cloud adoption but does not require organizations to use cloud services. This makes Open Value a better choice for businesses that wish to retain a mix of on-premises and cloud solutions or those not ready for full-scale cloud integration. Open Value offers flexibility in adopting cloud services without committing to a cloud-first approach.
Managing Compliance and Licensing Complexity
Compliance and effective license management are essential for avoiding penalties and ensuring smooth operations.
- EA Compliance Management: EA simplifies compliance management due to centralized tracking and an annual True-Up. By consolidating licenses under a single agreement, EA makes it easier for large enterprises to monitor software usage and maintain compliance. Software Assurance further helps organizations by offering deployment planning and audit support.
- Open Value Compliance Management: Open Value offers flexibility but requires proactive compliance management. Organizations must maintain an accurate inventory of deployed software to ensure that licenses are used correctly. Since Open Value allows more autonomy in purchasing licenses, small businesses may need robust tracking mechanisms to prevent over-deployment.
Which Agreement is Right for Your Business?
The decision between Microsoft EA and Open Value depends on your business’s scale, IT requirements, and growth trajectory.
- Choose Microsoft EA if your organization has over 500 users or devices, requires centralized license management, values Software Assurance, and prefers predictable, stable costs. EA is ideal for large companies that expect significant growth over the three-year term.
- Choose Open Value if your business is small to medium-sized, needs licensing flexibility, and prefers perpetual licensing. It is also ideal if your organization seeks a budget-friendly option with annual payments and selective Software Assurance.
FAQs
What is the Microsoft Enterprise Agreement (EA)? It is a volume licensing program for large organizations with 500 or more users or devices. It provides a cost-effective, scalable solution for managing Microsoft software and services across an organization.
Who should consider the Enterprise Agreement? It is ideal for large enterprises that must manage many users or devices and require a streamlined software licensing and management approach.
What is Microsoft Open Value? Microsoft Open Value is a volume licensing program for small to mid-sized organizations with five or more desktop PCs. It offers simplified license management, predictable costs, and access to value-added services through Software Assurance.
Who should consider Open Value? It is ideal for small—to mid-sized businesses looking for a manageable and flexible licensing solution that allows for predictable budgeting and easy license tracking.
How does the payment structure differ between EA and Open Value? The Enterprise Agreement requires an upfront payment, providing significant cost savings through volume discounts. Open Value offers annual payments over three years, allowing for predictable cost management and better IT budget control.
Can both EA and Open Value include Software Assurance? Yes, the Enterprise Agreement and Open Value include Microsoft Software Assurance, which provides access to training, deployment planning, software upgrades, and product support.
What are the key benefits of the Enterprise Agreement? The key benefits of the Enterprise Agreement include cost-effectiveness for large-scale deployments, simplified license management, and flexibility to add and adjust products and services throughout the agreement term.
What are the key benefits of Open Value? Open Value offers predictable cost management through annual payments, easy license tracking via the Microsoft Volume Licensing Service Center (VLSC), and comprehensive support services through Software Assurance.
Is there a difference in flexibility between EA and Open Value? Yes, the Enterprise Agreement offers greater flexibility in adding and adjusting licenses during the agreement term. Open Value focuses on predictable cost management and easy license tracking.
How does license tracking work in Open Value? Open Value includes access to the Microsoft Volume Licensing Service Center (VLSC), which allows businesses to easily track and manage their software licenses, ensuring compliance and efficient asset management.
What type of organizations benefit most from the Enterprise Agreement? Large organizations with 500 or more users or devices, extensive IT infrastructure, and a need for predictable, long-term licensing solutions benefit most from the Enterprise Agreement.
What type of organizations benefit most from Open Value? Small to mid-sized organizations with five or more desktop PCs benefit most from Open Value’s flexibility, predictable cost management, and comprehensive support services.
Can a small business use the Enterprise Agreement? While small businesses can use the Enterprise Agreement, the cost savings and benefits are more significant for large-scale deployments. Smaller organizations may find more value in the Open Value program.
Can I switch from an Open-Value to an Enterprise Agreement as my business grows? You can transition from an Open-Value to an Enterprise Agreement as your business grows to take advantage of the cost benefits of large-scale deployments and streamlined license management.
What should I consider when choosing between EA and Open Value? Consider your organization’s size, IT budget, and future growth projections. The Enterprise Agreement is suited for larger enterprises with more complex needs, while Open Value offers flexibility and predictability for smaller to mid-sized businesses.
