As the infrastructure world continues to become commoditized from a hardware perspective, differentiation between platforms is increasingly derived through the software that runs on the hardware. Accordingly, over the past several years software has become a much larger portion of the overall cost of a technology solution.
One of the most effective ways for an organization to save on software costs is to procure software and associated maintenance through an enterprise agreement, or EA. Dell Technologies has their version of an EA which they dub a Transformational License Agreement (TLA). Encompassing both software licensing & software maintenance, the Dell TLA offers cost savings and licensing flexibility to allow an organization to extract the maximum value from their investment.
Cost savings is arguably the most popular reason for entering into a TLA. Dell’s agreements entail a multi-year commitment with a typical duration of three, four or five years. In consideration for that commitment, Dell offers a discount on the software licensing and software maintenance versus the cost if the organization were to continue purchasing these items ad-hoc. These discounts vary, but typically larger agreements and longer durations achieve the greatest savings.
Along with death and taxes, one other thing that is certain is that costs will increase over time. One can be relatively assured that five years from now, an organization will pay more for the same software license and maintenance than they do today. However, many EAs lock in the cost for software licensing and maintenance for the duration of the agreement. Dell’s TLA is no exception and can be used as a means to help control rising costs over several years.
Technology changes rapidly; new products are constantly being developed and released that supersede existing technology. Many organizations have been hesitant to enter into an EA due to fear of being locked into a technology that may become obsolete prior to the end of the agreement. Dell’s TLA contains several mechanisms to prevent this type of lock-in.
When an organization enters into a TLA, the anticipated software titles and their associated capacities are listed in the contract. Unfortunately, it is impossible to be completely accurate when forecasting needs several years into the future.
To allow utmost flexibility, the agreement can be structured to allow for substitution between software titles that are listed in the TLA at no additional cost (see below for differences between the types of TLAs).
Suppose an organization is currently using PowerMax as their high-end storage platform and Unity XT as their standard mid-range platform. If the organization realizes that they added too much capacity to the Unity XT bucket in the TLA but not enough to the PowerMax bucket, they can simply move capacity from Unity XT to PowerMax through a no-cost amendment to their agreement.
Similarly, capacity can be shifted between hardware platforms. For example, if an IT department retires an array that is currently licensed under a TLA, the licenses can be transferred to the new array, effectively making hardware lock-in a non-issue.
Dell’s TLA agreements also provide the ability to add software titles to an existing agreement. There is typically a small fee and contract addendum to add the software title to the agreement. The aforementioned substitution mechanism is then utilized to fulfill the majority of the new software capacity at no additional cost. If an IT department decides to move from the Unity XT platform to the new PowerStore platform, this can be accomplished by adding the PowerStore software title to the TLA, then using capacity substitution to populate the PowerStore title appropriately. With this capability, an organization can be assured that they are not relegated to legacy software when Dell introduces new technologies and software.
Finally, should an organization exhaust its allotted capacity prior to the end of the term of the agreement, most TLAs include the provision to purchase additional capacity. The discounts offered for these over-capacity purchases are typically not as deep as those of the original TLA but are still offered at a discount over standard business-as-usual rates.
The cost savings and flexible licensing capabilities of Dell’s TLA ensures that IT organizations can easily and cost-effectively adjust to changing business needs.
Types of TLAs
TLAs are available in two types: Simple and Term.
A Simple TLA only allows substitution of undeployed capacity. Once a license is deployed it can no longer be used for substitution to another title, nor can it be moved to a different piece of hardware. At the end of the agreement, the software on a simple TLA remains active and locked to the hardware on which it was deployed.
A Term TLA allows substitution of both deployed and undeployed capacity. Licenses can also be migrated to new hardware. The Term TLA offers the greatest flexibility for substitution, however, at the end of the agreement, the TLA must be renewed or the deployed software licenses must be purchased, otherwise the software must be expired.
As businesses continue to use technology to build and maintain their competitive edge, IT departments must re-invent themselves to be more agile, scalable and resilient. While IT transformation may seem like an industry buzz word, the reasons for and resulting benefits of transformation are very real.
Dell Technologies’ expansive portfolio can help deliver the innovation and transformation that IT departments need to keep pace with business demands.
In concert with a TLA, Dell also provides an offering specifically geared toward IT transformation. The Transformation Program Amendment (TPA) provides a structure that allows an organization to utilize software from the broad family of Dell Technologies: Dell, DellEMC, VMware, Pivotal, SecureWorks and VirtuStream. This allows an organization to realize greater financial benefits through larger discounts, reduces complexity with a single agreement across the Dell Technologies portfolio and provides increased flexibility by allowing future purchases across the portfolio as business needs change and evolve.
How to get started
WWT has market-leading experience helping customers scope enterprise agreements to be as valuable as possible, but our engagement does not end once the agreement is signed. Our account teams and various specialists continue to work with our customers throughout the term of their agreements to ensure that they are achieving maximum value for their investment.
Additionally, WWT brings a vast palette of value-add capabilities to help ensure utmost success. Our Advanced Technology Center allows customers to rapidly test and de-risk technology solutions. Global Integration Centers provide supply chain, configuration, integration and deployment capability. Finally, WWT’s broad portfolio of services can be employed to create game-changing innovations that truly set our customers apart from their competition.
Contact your WWT representative to begin exploring how WWT and Dell Technologies can help your organization increase your speed of innovation and decrease your cost of operations.