With the switch from Microsoft to Ascentium, a number of changes were made to how Commerce Server is licensed. What we want to do with this blog post is simply run through all of them in a single place – and also provide some rationale as to how and why these changes were made – in seven simple briefs.
First, the number of editions was reduced to simply the Enterprise Edition. The Standard Edition SKU was removed. This was done because the majority of customers are using the Enterprise Edition, and the limitations in the Standard Edition (no Data Warehouse, no Staging, and deployment limited to two servers or 10 sites) simply did not make sense for most customers.
The Licensing Model
Second, the licensing model was moved from a per processor socket model to a per server model. It is our perspective that per processor socket or per processor core models simply don’t make sense, and are overly complex in this day and age. A per server model is considerably simpler in both physical or virtual scenarios. It also sets the stage for cloud computing, which tends to be licensed by the number of role instances provisioned – which is easily transportable from a per server model.
The Virtualization Special Case
That said, we do realize that some people run many virtual machines of Commerce Server on a very small amount of host hardware and that our new model would inflict some pain. To accommodate for that explicit scenario, we’ll allow Commerce Server to be licensed per physical underlying processor if being used in virtual machines only if that option is less expensive than licensing per virtual machine.
What Needs a License?
Third, in the case of what actually needs a license, there is no difference here between the Microsoft realm and the Ascentium realm. It’s quite simple; anything that is not used for developing or testing code needs a license. This would include any pre-production environments, environments used to manage or validate content, and environments used to interface with line-of-business systems – in addition to those actually used to process traffic. In the case of cold disaster recovery, if a system is truly powered off or otherwise completely network disconnected such that it is physically incapable of serving in any sort of production capacity until a failure occurs, it does not need a license.
Developer Licensing and MSDN
Fourth, if you have purchased at least one production license, you are covered organization-wide for licenses for developing and testing code. If you are a partner, you are also entitled to get developer licenses free of charge by joining our partner program at http://www.commerceserver.net/. These replace the Commerce Server licenses previously on MSDN.
The Payment Model
Fifth is how licenses are paid for. Previously, Commerce Server was licensed by Microsoft in three different ways:
- Perpetual + Software Assurance – You would pay up front and then 25% of the up-front cost annually for three years for updates.
- Subscription Agreement – You would pay annually for Commerce Server for the license rights as well as updates.
- Service Provider License Agreement – Hosting providers would pay monthly for the number of processors deployed.
We have simplified to a simple subscription agreement. It’s three years in length. You can get a free year if you have active Software Assurance for the number of licenses for which you had Software Assurance (converted at two processors to one server). Once the three years are up, you can renew on an annual basis. You commit to a base number of servers for the entire term, and then can add or subtract above that base for your subscription term. You can make adjustments to your base number of servers at the end of the term. If you’re a hosting provider, you simply pay for the number of servers deployed per month.
We did this for a couple of reasons:
- It allows us to seamlessly merge all of the various models into a single model – including the SPLA model (which is per server per month) on the same core set of license agreements
- Based on the payment schedule, the model can be either treated as CapEx or OpEx in most cases, giving customers more flexibility
- Customers that have fluid demand (e.g. – for holiday peak season) can commit to a static base and then pay only what they use above that – getting some of the benefits of the cloud in an “on premise” model
- It will translate seamlessly into future cloud models and also facilitate hybrid deployments
- If we add new license models in the future, a subscription gives us an easy basis to facilitate migration to a different model
The Price Itself
Sixth is the price. We wanted to set a baseline that is both aggressive from an overall industry perspective as well as be less than licensing the Microsoft Enterprise Edition, which is what the majority of customers purchased. We arrived at $12,000 USD per server, per year – or $1,000/month if on SPLA.
This translates to considerable savings over most Microsoft pricing. For example:
- The three year TCO of buying a perpetual license and three years of software assurance for a single dual processor server was about $70,000 at Microsoft’s list price – versus $36,000 at our list price.
- A SPLA hosting agreement would have typically cost a hosting provider $57,456 for a single dual processor server over 3 years at Microsoft’s list price – versus $36,000 at our list price
A couple of other points of note on pricing – we also offer localized pricing in GBP, CAD, and EUR. And if you look at the overall industry, our cheapest primary competitor is several thousand dollars more expensive per server, per year – also in a subscription model. Most competitors are considerably more expensive.
What about a test drive?
Seventh is how we handle evaluations. Microsoft did this in two different ways; initially a time-bombed version of the software was offered. That was later replaced by time-bombed virtual machines, which weighed in between 20-30GB downloads. It is our point-of-view that neither of these options are pragmatic. And, legally, we cannot offer virtual machines with other Microsoft software in it.
Today, we can offer a temporary license for evaluation purposes only. To get this, you’ll have to contact us – and sign a formal evaluation agreement as well as qualifying the purpose of the evaluation.
Tomorrow, as we deliver upon our intent to move Commerce Server to Azure, you’ll simply be able to go in and provision an instance – and easily get access to the software that way. Stay tuned for more details on this soon…
In closing, hopefully this has been of use to help demystify our licensing model and how we arrived at it. These decisions are never easy and it is impossible to please everyone – but so far the reactions have been extremely positive (at least once the benefits are fully understood).
We hope you agree – and at the same time, want to hear your feedback. This is likely not the only model (nor set of product editions we’ll offer) – but it is certainly what’s in place for the time being and remains a model that we’re committed to, especially as it lays a strong foundation for the future by being easily portable to cloud or hybrid scenarios or easy migration to other models.
Thanks for reading!