Subscription based licensing

[BlakeRichardson]

Hi all

Trying to find out if there is any cost benefit to subscription licensing or is the benefit simply around the purchasing and renewal of the licenses?

[CMR]

If the customer is large enough to get an Enterprise Agreement (EA) then there are definite cost and payment term benefits for subscription licensing. For the smaller customers (contracts less than $100k over the term), then I'm not sure...

[mloraditch]

From the math I've done the benefit is not really in pricing, but it does add license portability for switching within the various tiers.

[BlakeRichardson]

I thought that might be the case. Usually as soon as I read the word subscription based of past experience it means its going to be more expensive.

As long as Meraki don't move to a subscription only model like Broadcomm or Paessler.

[mloraditch]

The caution I have with both subscription and EA is the ability to spin out sites with licensing. I deal with Automotive Retail and there are constantly sales of sites. They make it nearly impossible to spin out a site and transfer the licensing if the new owner doesn't want it and with EA you have even more restrictions as there is a minimum value required for new contracts (100k actual cost). Cisco reps will just say you can but it's not at all automatic and your customer could be saddled with something for the duration of the term.

[Philip D'Ath]

It should be cost-neutral (or only be a little bit more expensive), but the pricing is sometimes messed up. It is safer to get a quote for both and then have the subscription quote fixed to match the co-term quote.

I use subscription licencing a lot (almost exclusively) with larger customers.

The first problem is with kit going EOS.

Lets say you want to buy a 5 year licence to get the maximum savings. But you have switches (or MXs or ...) going EOS in 3 years.

With subscription licencing you can replace that kit whenever you like (such as in three years time). You don't have to replace it at the same time as you buy your licences.

This also helps spread out the spend. Rather than one giant lump, you can spread it out as devices go EOS over the 5 year term.

The second problem is the time to roll out new kit. Lets say you are using co-term licencing, and at the same time you are replacing 200 devices spread out geographically. Once you apply your new co-term licence you have 30 days to complete the hardware swap out. After that you have a painfull licence grace extension to process every 3 weeks or so until you complete the process.

With subscription licence you can take as long as you want to replace the kit.

[Philip D'Ath]

Another memory just came back to me.

Subscription licencing is applied network by network.

I did a company recently that was managed as a single organization, but each site was financially separate from the others.

I sold each site their own seperate subscription for their own network. They can even have different length subscriptions.