News & Events

Cisco Enterprise Agreement – Cisco Licensing Explained

  • 11 March, 2019

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

What is a Cisco Enterprise Agreement?

A Cisco Enterprise Agreement is a contract that covers all of the software under that technology vertical within the Cisco portfolio. Simply put, if you use a lot of Cisco WebEx and Collaboration, there’s a Cisco EA for that. If you have a lot of Cisco firewalls, there’s a separate EA for security. The Enterprise Agreement is either a 3 year or a 5-year option.

There are currently four unique Enterprise Agreements in the portfolio that align well with the different technology stacks. They are as follows:

– Security

– Collaboration

– Data Center

– DNA (Routing, switching, wireless)

As you can see above, combining all those into a single agreement would be difficult due to how these are consumed and the fact that they commonly have different teams responsible for each stack. This makes consolidation difficult.

What are the benefits of a Cisco Enterprise Agreement?

Cisco Enterprise Agreements offer two main benefits over traditional licensing; cost savings and a significant reduction in operational overheads. Let’s examine each method in detail and step through the process.

cisco licenses enterprise agreement

What are the Cost savings with a Cisco Enterprise Agreement?

Similarly to the technology pillars, there are four main pillars of an EA that make the price attractive and provide immediate cost savings:

– Rebate for existing perpetual licenses

– Rebate for the remainder of SWSS purchase

– 20% growth factor

– Lowered price of entry vs perpetual licenses

The rebate eliminates the double-dip scenario commonly encountered when switching licensing models. The same goes for getting a rebate on the residual on your existing SWSS (software and subscription services). These savings go directly to the bottom line of the Enterprise Agreement.

Next up is a significant offering of 20% free growth during the term of the contract. In simple terms, let’s say your initial contract is $300k over three years. Cisco will allow an expansion of your software utilization up to 60k of additional value at no charge during the term of your contract. An example: you have a collaboration plan and are adding 50 new users who will need Webex and calling. In this scenario, you can simply enable all those users without buying anything new or incurring a charge at any point during the length of the contract.

For fast-growing companies who exceed that 20% threshold, there’s good news. You only pay for what’s beyond the 20% and Cisco only charge you going forward once the annual review has taken place. To recycle the example above, if you had 100 additional users and you were 30% above your initial license count, at the time of the annual review, Cisco would charge an additional 10% going forward only! No charge back costs to account whatsoever. This concept is referred to as “True Forward.”

Finally, the cost per unit is just outright lower than buying the equivalent perpetual licensing and the software support associated. That’s a direct saving.

What are the Operational benefits with a Cisco Enterprise Agreement

We discussed the operational challenges associated with the traditional licensing model in our previous article. Now we will go through how these are challenged with a Cisco Enterprise Agreement.

1

Herding the cats

Keeping an inventory of which license is attached to what device and assigned to which cost centre and the renewal date is an ongoing activity for a large number of IT staff that would provide better productivity for the business if focused elsewhere. With the Cisco Enterprise Agreement, the licenses are not tied down to the hardware, they exist in a pool and are cut from a centralized portal. The 20% growth factor means you can use them as you go without the need for a full procurement process.

cisco enterprise agreement time saving
2

Consistency in operations

Having your entire technology stack covered under a single agreement means you can build labs, cut licenses at will, and move them around onto different hardware. This importantly ensures that all your software modules are consistent and regularly updated with the latest features or threat prevention releases.

3

Single portal worldwide

Having all your teams working from a single portal for licensing consumption has the added benefit of aligning strategy across sites and theatres. Utilisation statistics provide valuable insights into how certain technology features are being adopted with one set of users vs another. As the software impact in traditional technologies continues to grow, companies will keep a close eye on which applications or features are being adopted as this will provide the foundation for future renewals, removing any guess-work.

Conclusion

The process to transition is more simple than you’d imagine. At Tesrex, we specialize in aligning these type of contracts. What we simply need from you is one meeting to discuss your goals, determine which Cisco Enterprise Agreements you’re best suited for and so we can start putting together a financial summary. The summary will consist of your current footprint with Cisco, the rebate breakdown (if applicable), the cost of the EA and the financing options possible to best suit your budget.

Your involvement is minimal and there is not any additional burden on your staff. We’ll perform all of the background work and come back to you with actionable findings. Once executed, you’ll have access to your licensing portal and can carry on as usual while realizing the costs savings and operational benefits.

Please click here if you would like to discuss anything you have read in this article or are looking to begin your journey towards a Cisco Enterprise Agreement.

If you would like to read our previous article in this series regarding Cisco Licensing, click here.

Tweet
Share
Share