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Understanding the Cisco True-Forward concept

  • 2 July, 2019

Article, Cisco, Cisco Licensing Explained, Enterprise Agreements, Licenses

As Cisco is making the transition to becoming a software subscription business, they are heavily promoting their Enterprise Agreements which collate all the licenses under an architecture into a single contract. They have therefore heavily incentivised this new licensing method with discounts, management tools, and the Cisco True-Forward concept which is what we will be looking at in more detail in this article.

The traditional True-Up model

Before we look at what Cisco True-Forward is, we must explain the traditional true-up. A true-up is the industry standard and if you’ve been involved with technology licensing at any point in your career you will likely be familiar with this term.

When a software agreement is drawn up, the customer provides a “good-faith” estimate of the usage they expect the software to have within their organisation, based on parameters such as the number of users or devices. The price of the software agreement is then based on this estimate.

From here, an annual usage review date is set where the vendor will inspect the actual usage of the software by the customer. If the customer has deployed a different software platform from the same vendor within that year, the vendor will check when they began using it and calculate how much money they are owed for that previous period. The customer pays this and then continues paying for it for the subsequent years going forward. This is a true-up.

Why Cisco True-Forward changes the game

This is where Cisco Enterprise Agreements are different from those from other vendors. A Cisco Enterprise Agreement has the Cisco True-Forward concept built into the contract. Cisco True-Forward means you can adopt a new technology platform at any point during the year and use it as much as you like until your annual review date. This is also true when it comes to adding additional users to existing subscriptions. When your review happens, Cisco will note that you have deployed a new technology or more users, but ONLY charge you for it from that date onwards. The previous year of usage will be absolutely free! This is because Cisco wants businesses to have the ability to adopt new technologies and allow their customers to grow in a manageable and affordable way.

cisco true froward

In this example, the business in question has their annual review date to take place in January every year. In March, they decided to deploy a new security technology, Stealthwatch. As you can see in the diagram, a true-up would mean the vendor would look back at the previous 10 months of usage before the January review date and charge the customer for this. With Cisco True-Forward, Cisco can see that the business has been using Stealthwatch for 10 months already but will not bill the business for this. Instead, they will only charge them for future usage of the platform.

Benefits of Cisco True-Forward

Assisted growth

Cisco always want their customers to grow and succeed as in the long run it will help both parties and it validates the effectiveness of Cisco’s portfolio. Cisco True-Forward is one way that Cisco can really help their customers expand in an attainable way. If a business wants to add a certain part of Cisco Collaboration because it will boost their employee productivity, they don’t have to wait until they can afford it. They can deploy it within the day at no cost for them. They will only start paying for it once their annual review date comes around by which point the business will, in theory, already be performing better.

cisco true-forward

Improved budgeting

Cisco True-Forward has the added benefit of helping with budgeting. With other Enterprise Agreements that use true-up, there might be uncertainty about how much the vendor is going to say that you owe them once your annual review comes along. This means that budgeting can be tough as fees will be unpredictable.

With Cisco True-Forward you only pay for software you use going forward. This means you’ll never be caught out by large chargebacks that can occur when trueing-up.

cisco true-forward

A final note...

As you can see, there are some very clear benefits to Cisco customers of the True-Forward concept. The ability to grow without penalisation is one of the best incentives Cisco offer to businesses who are looking to deploy a Cisco Enterprise Agreement. Combined with other EA incentives offered by Cisco, customers can end up saving a huge proportion on their annual licensing bills.

If you would like to ask questions about the Cisco True-Forward concept or Cisco Enterprise Agreements in general, please don’t hesitate to reach out to us. We are experts on the subject and would love to provide you with any information that you require.

Need some assistance?

Contact us today! Our experts are happy to have a discussion with you about your issue and provide you with the help you need.

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