What’s Wrong with Enterprise Agreements?

Enterprise Agreements (EAs) are growing in popularity as organizations are looking for flexible agreements and streamlined procurement to meet their evolving business needs. Historically, these types of buying programs are ideal for large organizations that want to get the right tools into the right hands in an efficient and cost-effective way.

Another appeal of EAs is the promise that it will simplify the adoption of the latest and greatest versions of technologies that are offered by a vendor.

EAs are popular with CFOs because they are designed to offer predictable cost, provided organizations comply with agreed upon usage rates.

While all of this sounds euphoric for IT organizations, experience often shows that great things are rarely easy or as they seem, for that matter.

That’s why Cisco took great strides to understand the shortcomings of EAs and even commissioned research from IDC to show the top pain points for organizations before developing its Cisco Enterprise Agreement.

Enterprise Agreement Issues

IDC’s research findings are outlined in a white paper, “Solving the Top 5 Enterprise IT Infrastructure Software Management Challenges” which applies to a global audience of both IT and LOB leaders.  In summary, the key findings are that even the most sophisticated IT organizations struggle with:

• Asset Management
• Compliance
• Contract Terms
• Mitigating and Managing Software Fees
• License Management

In this paper, IDC offers suggestions for navigating EAs and outlines the key features of the next-generation of volume license agreements.

As CIOs and IT managers struggle to manage complex hybrid IT environments, they are looking for software providers with license agreements that are flexible, easy to understand and can accommodate their needs as they change over time.

IDC believes that software providers with newer approaches to software licensing for both on-premises and as-a-service solutions will be well positioned going forward.

Cisco has historically had a large presence in the software market and is focused on strengthening this presence through investments in software technology and business strategies. To complement its portfolio of technology solutions and help make customers and partners more successful, Cisco is putting software at the heart of its strategy, working to migrate more offerings to the cloud, and adopting a more flexible and open approach to software.

Cisco’s Approach to Enterprise Agreements

And now with Cisco’s Enterprise Agreement (EA), the company is offering customers a 3- or 5- year agreement that provides customers enterprise-wide coverage of predefined software suites with modern features for today’s organizations. Features such as:

• Simplicity: Single agreement, a single term, and a common workspace
• Flexibility: Various consumption, deployment, and payment arrangements
• Value: Includes a 20% growth allowance and the industry’s first true forward (no retroactive billing)

Listen to an interview with John Marshall, Senior Director of Enterprise Buying Strategy, where he talks  about how Cisco is making enterprise management software easier.

Read IDC’s latest research and an assessment of Cisco’s Enterprise Agreement offering.