SharePoint Purchasing Travels – Capital vs. Expense

In my travels – around the world of purchasing SharePoint – I’ve had a variety of experiences. Typically – my experience has been I’m sent a very complicated spreadsheet from a re-seller or directly from Microsoft. I’m then based on the numbers in the spreadsheet – trying to negotiate the best price per seat as well as per server license. Since a large majority of my experience is based with on premise I’m keen to the fact that every user that attaches or will possibly attach to SharePoint needs a license.

Now, if I’m running a standard edition only – typically this is easier because all the users will need a license. Now, if I’m running an enterprise edition – it’s a bit more complicated because not only do all users need a standard license but they will also need an enterprise user license as well. This in my view is a complicated aspect that many don’t realize.

I will say however that the model has gotten easier as Microsoft now provides an enterprise framework, however even though this appears to be marketed for the cloud based organization, it can be utilized for on premise and cloud. Example if one purchases 100 user licenses under what is known as an E3 (Enterprise 3) license those licenses can be utilized for either on premise or in the cloud. This makes getting users the needed tools quicker and easier.

In regard to cloud, those who rely on a capital vs. expense budget are in luck. Under newly established accounting principles cloud based can be capitalized if one can make changes to the software/system and also if the service can be controlled from an on premise point. Therefore, if one is in an hybrid situation where SharePoint is installed on premise and OneDrive for Business is in the cloud – the case can be made that the cloud standard are met and can capitalize expenditures instead of using an expense.

Historically, a vast majority of the SharePoint work I’ve done is expense (training, user licenses, service agreements and support and enhancements) while I’ve capitalized the following -> server licenses, virtual machine licenses, virtual machine racks, and software licenses.

Every organization may think differently on this front but in my view it’s an important one to think about to account for as it’s not always about what SharePoint can do, but how to get it!

Video: