How to negotiate a Cisco Enterprise Agreement that works for you ⋆ Networkking4u

How to negotiate a Cisco Enterprise Agreement that works for you

How to negotiate a Cisco Enterprise Agreement that works for you

Cisco enterprise Agreements (“EAs”) are becoming an increasingly famous car for getting and consuming software program services and products from Cisco.

the general idea is that – in place of shopping individual software program products and associated softwaremaintenance on a unit by unit basis – the organization pays Cisco an in advance rate to cover all of its purchases of a certain suite or suites of Cisco software products, plus the related software preservation, over an agreed length.  EA unit pricing is generally a function of the quantity of legal customers, or covered gadgets.
however different metering units may follow to sure suites.

The benefits to the customer are that the in advance fee for the suite or suites under the EA should be much less than it would have paid to buy the software licenses and help on a unit through unit foundation, and the customer can gatherextra software program or provider gadgets to satisfy its business desires without incurring extra feesprovided that the full consumption remains inside certain boom limits.  The benefit to Cisco is that it gets a lump-sum fee in advance for final a sale for a sizable quantity of enterprise in a single transaction.

Cisco objectives its EA propositions, which they name suites, at Cisco ONE software, collaboration software program and safety software products.  drasticallythose EAs do no longer cover the sale or guide of Cisco’s hardware products.

 

Maximizing the value of a Cisco Enterprise Agreement

As with any new deal construct, there are various important criteria enterprise buyers must consider to realize the benefits they expect.  Sizing the EA correctly is one of the most financially significant considerations.  Some earlier iterations of Cisco EAs offered, to all intents and purposes, an all-you-can-eat proposition, with no limits to organic growth, which is broadly defined as growth that is not due to mergers and acquisitions.  Cisco now rarely offers all-you-can eat EAs.  The current iterations of EAs cover a specific projected quantity of software consumption, with an allowance of 20% growth before additional charges apply.

When determining the covered users, devices or other metered usage baselines for the EA, you must strike a balance between making sure that the EA is not oversized, which would cause you to pay for units that will never be consumed. You must also make sure it is not undersized, which would introduce a risk of exceeding the growth allowance and give rise to additional payments, unless you intentionally design it that way.

Cisco Enterprise Agreement And Top Enterprise Software Challenges

Cisco uses an “End User Information Form” (EUIF) to document the exact inventory by type and count of product and services the EA will cover. The EUIF also establishes the growth allowance.  You should obtain, review and validate the EUIF early in your negotiations with Cisco to set the optimal baseline and growth allowance.  If, for example, your forecast of what you will consume under the EA is very accurate, you may want to under-size the EA slightly so that the in-built 20% growth allowance covers the expected overage from such under-sizing, thereby maximizing the realized value of the 20% allowance.

In evaluating the value proposition of an EA, you must understand the rate at which you would expect to use the covered products.  In particular, Cisco will present the value assuming you will consume all covered products from day one of the EA. In reality, you are likely to ramp up your usage over time as you deploy the applicable software throughout the enterprise. This makes little difference when purchasing perpetual software licenses since you incur the same cost regardless of when it’s purchased. But for software maintenance and software purchased on a subscription basis, the start date is relevant because there is “lost” value from the EA for unused software maintenance and subscriptions as you ramp up consumption.

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