11 Jan 2024



Microsoft Licencing

How an MPSA and used licences can be combined     

Whether applications, operating systems or servers - Microsoft dominates the market for standard software. Almost every company uses and licences products such as Windows or MS Office. The range of licensed Microsoft products and services is correspondingly large for medium-sized companies, corporations and larger institutions or public administrations, making software procurement and licence management a constant challenge for IT managers and software asset managers. With a Microsoft Products and Services Agreement, or MPSA for short, software procurement and licence management should be significantly simplified and also become cheaper for companies thanks to built-in discount levels. In this blog post, we therefore take a closer look at the topic of MPSA, provide answers to important questions and explain why the combination of an MPSA and used Microsoft licences on-prem operation does not have to contradict each other.

What is an MPSA and for whom is it particularly suitable?

A Microsoft Products and Services Agreement is an open-ended licence agreement for the transactional procurement of volume licences. This is particularly suitable for larger medium-sized companies, corporations, public administrations or educational institutions that purchase, use and manage a large number of Microsoft products and services across locations and national borders. At least 250 users or devices must be available in order to conclude such a licence agreement.

What advantages does an MPSA offer?

  • More flexibility by bundling various Microsoft products and services, such as on-prem software, cloud services or both, in a single contract. These can be expanded or reduced at any time, and Software Assurance (SA) can also be added as an option.

  • Centralised management of licences and software transfers via assigned purchasing accounts in the Microsoft Business Center.

  • Easier scalability for fast-growing companies that can quickly add new licences without having to conclude separate contracts.

What disadvantages can result from an MPSA?

  • Simplified software procurement via smaller organisational units quickly leads to overcapacity and inefficiencies that exceed the actual software requirements and burden the licence budget despite possible discounts.

  • Software procurement has a one sided focus on Microsoft products, which increases the risk of dependency and even vendor lock-in, especially for cloud products and services.

  • Due to the focus on procurement, the view for innovative software solutions from other providers as well as more favourable and sustainable licensing options is lost.

How does software procurement with MPSA work?

Software procurement as part of an MPSA takes place via so-called purchasing accounts. The use of purchasing accounts offers companies the opportunity to flexibly allocate the purchase and management of Microsoft software and services to individual organisational units, such as departments or project groups, and thus to manage the respective requirements and the associated budgets more efficiently. This also enables a clear allocation of licence costs to specific business areas, which also facilitates budgeting and cost control.

Each purchasing account is registered once and assigned to one of the three customer segments Commercial, Academic or Government. Purchasing accounts from different segments can be managed in an MPSA. Within an MPSA, a purchasing account is designated as a so-called contract administrator, which controls the MPSA across the board and can, among other things, display the complete licence inventory across all accounts. 

In addition, various Licensing Solution Partners (LSP) can be assigned to a purchasing account, although they must be authorised for the region of the purchasing account.

What product groups and price levels are there and how does a price level adjustment work?

Within the Microsoft MPSA, there are three product groups - operating systems, applications and servers - for each of which a separate price level is defined and set. The price level is based on a so-called point value system, depending on the respective prices for a product. Both on-premise volume licences and cloud-based products are grouped together, making an MPSA particularly suitable for hybrid software landscapes. There are currently four price levels, each with defined point values. For example, price level 1 currently applies from 500 points and level 4 from 25,000 points.

Purchases from purchasing accounts within an MPSA are summarised for companies in the Commercial product segment and continuously converted into minimum point limits in order to achieve the most favourable price level. The purchasing account pool is continuously reviewed during the contract period. As soon as the corresponding annual minimum point limit, for example 500, is reached for an order, the discounted price of subsequent level 2 applies to this order. The new price level then automatically applies to all subsequent orders for the entire organisation. Organisations in the areas of research and teaching (Academic) and public administration (Public), on the other hand, only have one price level.

MPSA and used Microsoft licences - does it work?

In addition to an MPSA licence agreement, it is also possible to license and use used software licences from Microsoft without any problems. In particular, companies that utilise the advantages of cloud-based products and services as part of a hybrid software architecture, but consciously rely on on-prem solutions in some areas, can benefit from both licensing options. If no Software Assurance (SA) is required for the licences to be purchased, it is almost financially obvious to buy them second-hand and take advantage of the associated price benefits of up to 70 percent compared to MPSA licensing.

The advantages of used on-prem licences from Microsoft

As one of the pioneers in the European trade in used software, PREO offers companies, organisations and public administrations a large selection of used volume licences for current and older versions of standard software from market-leading manufacturers, especially Microsoft. Whatever your need for used software for operating systems, applications or servers, with PREO you have all the advantages on your side:

  • High savings on ongoing licence costs of up to 70 percent compared to the respective new version. 
  • 100 percent legally compliant and audit-proof licence acquisition with maximum transparency in all processing steps, including complete documentation in the PREO "Easy Compliance" licence portal.

  • Many years of expertise in the integration of used software licences into classic network structures or hybrid licence models.

  • Detailed market knowledge and extensive experience through the audit-proof transfer of over one million used software licences.

  • Existing software licence management capacities for large IT infrastructure projects with thousands of workstations and cross-border locations.

  • Active contribution to reducing the CO2 footprint in the IT sector by entering into a resource-conserving circular economy, including the extension of software and hardware cycles.

  • Convincing reference projects for numerous well-known companies from a wide range of industries.