EA Myth Busters

EA Myth Busters for the Public Sector

Public sector customers
don’t buy subscriptions or Enterprise Agreements.

Many vendors sell subscriptions to the public sector.
Public sector entities purchase subscriptions from:

Public sector customers
prefer CapEx. Term licenses cannot be capitalized.

Fixed term licenses and subscriptions are common in the public sector.
Examples of public sector deals:
Fixed term minimum 3 years AND a fixed fee
Fixed term minimum 5 years
Subscription software “integral” to hardware
Subscription that “improves” hardware
Each agency/customer has its own policy and interpretation, reflecting what a fixed asset is (CapEx)
We can qualify and move past the OpEx/CapEx Issue to consider:
What fixed-term licenses are purchased
Which budgets are used (OpEx/CapEx)
Who establishes the policy
What are determining factors for the agency

Myth	Reality
All EAs are OpEx spending.	Understand what your customers need for CapEx treatment. Each agency/customer has its own policy and interpretation, reflecting what a fixed asset is (CapEx). Engage finance and treasury in the agency.
Legal requirements makes EAs impossible.	In FY19 over 3000 EAs were sold. Cisco Legal has seen it all.
EAs include Smart Net Total Care®.	EAs cover software and software support. Smart Net Total Care is hardware focused.
Multisource agreements (MSAs) and EAs cannot coexist.	EAs are the way to enhance the MSA with new recurring software (RSW) benefits for you. An EA letter of agreement can be added as annexure to existing MSAs.
Existing customers who have bought perpetual licenses have to double-pay for EA enrollments.	An installed base credit for existing purchases will be applied to EA pricing. SWSS moves to EA and now has access to new features and upgrades.
EAs take a long time to price and then close.	Fast pricing and quoting is available in the EAMP tool.
EAs get paid only on the first year (Annual Contract Value).	Total Contract Value (TCV) is paid upfront.
EA is only for new opportunities.	Know your refresh and align EA buying with growth and future software subscription purchases.
Only software spend is relevant in EA conversations.	Storyboard combined software and hardware plans. Cisco Capital® can structure EA and hardware lease into a single payment plan.