On-premise solutions instead of the cloud - why Microsoft Office 2024 LTSC will increase the demand for used software.

Convincing reasons for the use of used Microsoft licences

Even though Microsoft wants to position its cloud-based subscription model Microsoft 365 Apps even more strongly on the market with its new Office version, those responsible have recognised that they cannot do without an on-premise solution. The Office LTSC 2024 version (LTSC = Long-Term Servicing Channel) will therefore be available for companies or public administrations in the second half of 2024. This is probably mainly due to the fact that many IT managers still prefer local on-premise solutions, at least in some areas. There are many reasons for this: for example, cloud-based software is simply not necessary due to a stationary and regulated working environment, the security risks associated with the cloud are considered too high or the licence fees that continually accrue in the subscription model become a financial burden in the medium and long term. The planned price increase of around ten per cent for Microsoft Office 2024 is likely to further increase the cost pressure for cloud-based software solutions.

In this blog post, we answer basic questions about the new version of Office LTSC 2024, explain why the on-premise solution will continue to pay off for many companies as a purchase licence and show how they can tap into new financial potential by using used Microsoft licences.

Microsoft Office LTSC 2024 - Life cycle and licence model

Like the previous version, Microsoft Office 2021, the Office LTSC 2024 purchase licence for companies includes a fixed lifecycle of 5 years with all security updates (fixed lifecycle policy). In addition, it can be used indefinitely, albeit without further updates. Depending on the area of use, Software Asset Management must assess how the used software should be handled in terms of security and licences after the five-year update cycle. One decision criterion can be a differently weighted security factor, as MS Office is not an infrastructure product, unlike a Windows server or SQL server, for example.

The licence model will not change either; the 2024 version is again a device-based purchase licence that does not depend on how many employees access it as users. This is a major advantage, especially for shared workstations, compared to the user-based subscription licence for Microsoft Apps 365, where the corresponding licences have to be purchased for each user.

PREO tip for on-premise solutions: Sell licences you no longer need and benefit twice

Companies are still simply writing off their unused or no longer required volume licences instead of selling them in full or in part via the secondary software market and generating additional cash flow. Above all, those responsible should ensure that the buyer has many years of experience, high compliance standards and licence law expertise in the European trade in used software. The income generated by the sale expands the existing IT budget and creates new scope for necessary investments. Our free downloadable checklist offers help in selecting a suitable provider.

An additional plus: the secondary or multiple utilisation of software products is an important contribution to an active circular economy and thus to reducing the company's CO2 footprint. This aspect is currently gaining relevance for more and more companies in the wake of the extended disclosure requirements for sustainability activities within the EU.

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Microsoft Office 2024 - on-premise solution or cloud subscription?

The announced price increase of around ten per cent for Office LTSC 2024 will of course initially lead to higher investment costs for the purchase licence. Nonetheless, the purchase licence should reach its break-even point after around a year, given the comparably rising costs for the cloud-based subscription model. This is because while the subscription costs continue to run continuously and are subject to future price increases depending on the volume licence agreement, no further licence costs are incurred for the purchase version during its lifetime. On the contrary: part of the investment costs can even be recouped when the used licences are sold at a later date.

The PREO licence experts therefore recommend using the upcoming Office release as an opportunity to review your current workplace-related licence requirements. To increase the efficiency of their licence management, IT managers or SA managers should ask themselves the following questions, among others:

• On how many workstations is the latest cloud-based licence version with full application scope functionally dispensable?
  
• How many stationary workstations are there that several employees need access to?
  
• In which areas and on which devices are no updates to functions likely to be required for several years?
  
• How many devices are not connected to the internet for security reasons?
  
• Are there applications or specialised systems within the IT landscape that are only allowed to run embedded apps for a limited period of time?

For these areas of work, the purchase licence should in most cases pay for itself in the second year after purchase. And this does not take into account possible future income from the sale of used software licences.

On-premise solution used software - PREO expertise and large selection

We are one of the pioneers in the European trade in used software and offer our customers a large selection of used on-premise licences from Microsoft, such as application software, operating systems or server licences. Take advantage of the free and non-binding initial consultation with PREO's licence experts and benefit from:

• 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 licence portal "Easy Compliance".
  
  
• Personal advice on all questions relating to licence transactions or the integration of used software licences into traditional network structures or hybrid cloud models.
  
  
• existing software licence management capacities for large IT infrastructure projects with thousands of workstations and cross-border locations.
  
  
• more sustainability in the IT sector by promoting an active circular economy and reducing the company's CO2 footprint. Speaking of sustainability: PREO is the first used software retailer to be listed with a scorecard by EcoVadis, the world's largest provider of sustainability ratings.
  
  
• The expertise gained from numerous reference projects that PREO has already successfully realised for well-known companies from a wide range of industries and sectors.
  
  

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