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How Does Merger, Acquisition and Divestiture Activity Impact Your Microsoft Licensing?

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About UsTrusted globally by some of the world’s most well-known enterprise

companies, is the leading provider of expertise and

negotiation services around Enterprise software contracts. Combining an

unparalleled knowledge of the DNA that make up software agreements with the

ability to understand company’s individual requirements, is

able to drive out significant costs and align agreements to business priorities

NOT to those of software vendors and their programmatic objectives. Using

technology, process and knowledge derived from the analysis and negotiation

of more than a thousand contracts, we help put explanation around the

unknowns that create compliance gaps and control spiraling costs associated

with Enterprise software agreements.

SAVING YOU TIME, MONEY AND AGGRAVATION

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Our Core Value Proposition

Consulting Services

Microsoft Enterprise Agreement Negotiation

Microsoft Audit Assistance

o The value of our retainer relationships is in the personalized, and unrestricted access to all of our experts

o Retainer clients enjoy services such as published resource papers, white papers, webinars and training sessions

o Retainer client receive a 30% discount on additional engagements (outside of retainer)

o Microsoft is getting much more aggressive with audits

o Free up your time and resources

o Method 180 has a proven track record of dramatically reducing compliance costs

o Most organizations leave money on the table with Microsoft during negotiations

o Method 180 averages 25-30% cost reduction on enterprise agreement renewals

o Be informed and educated about how to drive costs out of your enterprise agreement

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How Does Merger, Acquisition and Divestiture Activity Impact Your Microsoft Licensing?

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There are three Basic Types of M&A Activity:

1. Acquiring a portion of a company

2. Acquiring a whole company

3. Divesting from a parent company

How you prepare for each of these scenarios have some overlap but also many differences.

A key concept to remember is that a license gives a company a right to use software it does not give a company ownership of the software.

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Relevant Language within the Microsoft Contracts:

If you have an EA, the language that defines the entity is crucial if the box include all affiliates acquired after the EA could have very dramatic impact.

M&A is one of the biggest drivers of Software audits.

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Steps to Licensing Due Diligence

1. Review the Policy and Procedures of both companies for software purchase (EA, Select), deployment, usage stats and asset recovery

2. Use a software tool to review deployments

3. Create a license position for both organizations

4. Transfer licenses as required

5. Use both companies software inventories as a baseline to manage license once M&A is complete

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Different types of licenses that you can acquire:

1. OEM Licenses

2. Full Package Product

3. Non-contractual volume licenses (e.g. Open Licenses)

4. Contractual volume license (e.g. Select/MPSA/EA)

5. Leased Software (in the case of Microsoft this could be subscriptions like Office 365)

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Things to Consider When Merging Contracts1.EA to EA

• Enterprise products (Eg. Platform vs Office only)• Use of Office365• Expiry Date • Pricing (Eg. Level and discount)• Concessions• Additional Products

2.EA to Select• Levels• Software Assurance• Upgrade Cycle• New Affiliate language in EA

• Do you have to add?

3.Ad Hoc• Entitlements• Software Assurance• Pricing Level

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When acquiring another company:

1. Try to negotiate a clause into the purchase for an escrow for unlicensed software

2. As soon as you are able to perform a self-assessment of the acquired company

3. Validate that the licenses/contract was transferable

4. If they were incorrectly licensed you as the acquirer are responsible for any shortfalls

5. For any extra licenses add to your pool of licenses to cover off future requirements

6. Determine if you should renegotiate/merge/leave current contract in force

7. Get in writing from Microsoft agreement to transfer licenses/contract

8. Do you require any amendments (ie. Datacenter moves)

In general if you acquire 100% of the company the contracts are transferred with the acquisition

If you purchase a portion of the company you will need to complete an official license transfer (an amendment)

Remember: Transferred licenses are unlikely to show up in any Microsoft license reports its your responsibility to keep track of these.

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What you should do post M&A:

1. Educate your team on software acquisition and transfer process

2. Request all contracts, license agreements, access to Licensing (MVLS) portal with logins as necessary

3. Review all entitlements being acquired (or divested)

4. Create a license position against inventory

5. Determine how best to combine licenses

In general if you acquire 100% of the company the contracts are transferred with the acquisition

If you purchase a portion of the company you will need to complete an official license transfer (an amendment)

Remember: Transferred licenses are unlikely to show up in any Microsoft license reports its your responsibility to keep track of these.

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What can I do to protect from an Audit

Best thing is to be proactive and be prepared!

• Know what your contract says you can and can’t do• How are your licenses counted• Enterprise versus Additional Products• Program rules (EA versus SCE vs Select)• Understand the process they are going to use if they audit you

• AD • Scripts• MAP Toolkit

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How Method 180 Can Help You

Best thing is to be proactive and be prepared!

• Review contracts of both companies to understand what licenses are owned• Develop a strategy to combine contracts of the two companies• Perform a self-assessment to determine what your inventory is• Create an optimized License Position• Identify shortages and develop a strategy to mitigate• Identify overages and develop a plan to avoid rebuying in the future• Ensure license transfers are correctly documented with Microsoft

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Questions?

Mike Austin – VP Service Delivery

PH: 1-888-978-5129 ext 701

www.method180.com

mike@method180.com

@austinmik

@infomethod180