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Mature networking vendor seeks flexible commitment from software suitors

Cisco’s new software license agreement means one payment can cover code and services

Cisco has updated its main software licence, the Enterprise Agreement, to version 3.0 and claims it’s now more flexible as while you need to commit to a certain level of spend up-front, your payments can be shifted among products, or even spent on services.

The new agreement carves Cisco’s software products into five “portfolios”: Networking Infrastructure, Applications Infrastructure, Collaboration, Security, and Services. Hardware is not included – you get to acquire that separately, and then buy an Enterprise Agreement for the code that brings the boxes to life.

A single enterprise agreement (EA) can cover all five of the portfolios, with a floor price of $100,000 applying across the board. Any EA must also include what Cisco’s calling a “Full Commit” to one product in the portfolio.

To understand this, imagine a user of Nexus switches that signs an EA for $100k a year with Cisco, and makes a Full Commit to DNA for Switching. According to Cisco’s Enterprise Agreement 3.0 Program Guide [PDF] that costs $50,000. The remaining $50,00 in the EA can then be spent on other products in the portfolios – or on Cisco services.

It’s also possible to move a Full Commit. If our hypothetical Nexus shop moved to cloudy Meraki switches, they could move their Full Commit too and not pay extra. That’s the only such swap, for now, but Cisco told The Register more swaps are coming.

Customers can use one EA to buy into multiple Portfolios. Doing so doesn’t mean having to work with a single Cisco partner: the company told us it knows that buyers like working with specialist service providers. The new EA can therefore cover all the products you want, but you can choose a networking specialist for networking and a collaboration specialist for your collaborationware.

The new EA keeps a feature from its predecessor called “True Forward” that sees Cisco notify you if your consumption exceeds the value of your EA and allows you to change the value of the agreement in the next quarter or year. Switchzilla thinks this is a better arrangement than being slugged with a bill for excess use.

Cisco plans to evolve the new EA with monthly changes and updates, which will be welcome because at the time of writing only the Networking Infrastructure portfolio allows internal Commit swaps.

Gary Wolfson, director of Cisco's Global Partner Software Sales team, told The Register more swaps will be added based on customer requests and after Cisco has observed how the first offer is received.

Any new swaps could be more complex than changing DNA for Meraki, as the Program Guide details many different consumption levels and details that some each Portfolio has its own pricing scheme based on different metrics.

Wolfson defended that by saying “Customers have asked for more flexibility and to do that you need more variables.”

Another variable in play is to ignore the new EA, and instead pay up front for Cisco’s wares or buy them through a managed services provider. Wolfson said Cisco doesn’t mind if you do so, but that Cisco thinks the EA best meets customers’ needs. ®

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