Cisco Enterprise Agreement Growth Allowance

When determining which users, devices, or other baselines of measured EA usage, you need to strike a balance between ensuring that EA is not oversized, which would cause you to pay for units that will never be consumed. You also need to make sure it`s not undersized, which would result in a risk of growth compensation being exceeded and additional payments unless you intentionally design it. The general idea is that the company, instead of purchasing individual software products and the resulting software maintenance individually, pays Cisco an upfront fee to cover all of its purchases of a particular suite or suite of Cisco software products, as well as the resulting software expectation over an agreed period of time. EA unit prices are usually a function of the number of authorized users or devices covered. However, other units of measurement may apply to certain sequences. As with any new deal construction, there are different important criteria that business buyers need to consider to realize the benefits they expect. The correct sizing of the EA is one of the most important considerations from a financial point of view. Some earlier iterations of Cisco EAs offered in all respects an unlimited offering of organic growth, generally defined as growth that is not due to mergers and acquisitions. Cisco now rarely offers all-in-case EAs. Current iterations of EAs cover a certain expected amount of software consumption, with a tolerance volume of 20% growth before creating additional charges. Cisco uses an End User Information Form (EUIF) to document the exact inventory based on the nature and number of products and services that the EA will cover. The FIE also sets the growth allowance.

You must solicit, verify, and validate the EUIF at an early stage of your negotiations with Cisco to determine the optimal base and growth compensation. For example, if your prognosis on what you will consume in EA is very accurate, you might want to slightly undersize the EA, so that the built-in 20% growth allocation covers the expected overrun by such undersizing, thus maximizing the value of the 20% allocation realized. ‚óŹ Easy to Buy: Customers get a single deal, duration, and workspace for license management By evaluating an EA`s value promise, you need to understand the utilization rate of the products covered. In particular, Cisco will present the value by assuming that you consume all the products covered from the first day of the EA. In reality, you will probably increase your usage over time if you provide the corresponding software throughout the company. This makes little difference when buying open-ended software licenses, as you incur the same costs regardless of the date of purchase. However, for software maintenance and subscription-purchased software, the start date is relevant, as the EA has a “lost” value for unused software maintenance and subscriptions if you increase consumption. .

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