A new fiscal year for Microsoft, a new range of price increases for its products. Shortly after its new fiscal year kicked off in July, Microsoft announced pricing and programmatic discount changes that will go into effect on October 1, 2018. This is in addition to the 30 percent price increase for Microsoft Unified Support, which went into effect worldwide earlier this year.
Microsoft Enterprise Agreement License
Changes You Need to Understand
Microsoft is removing its programmatic Level A discounts for EA/Select/Select Plus/Microsoft Products and Services Agreement contracts. This will result in a 3 percent increase for cloud services and a 4 percent increase for on-premises licenses.
Microsoft will remove Open, Open Value, and Open Value Subscription Level C discounts. This means you can expect to pay up to 10 percent more depending on the specific program and product.
Microsoft is increasing costs for on-premises products such as Office Professional Plus, Office servers, Enterprise, and Core Client Access License (CAL) suites and Windows Server Standard by 10 percent. A current user of Windows Server RDS Device CALs? Expect to pay 30 percent more for it starting on October 1. Costs for Windows 10 Enterprise desktop operating systems per device licenses will rise up to 32.5 percent.
This is especially important for customers with contracts expiring between now and the end of 2018. Without the right preparation, if you have an Enterprise Agreement (EA) contracts expiring at Microsoft’s current fiscal year end (June 30, 2019) won’t be able to take advantage of early renewal concession opportunities.
It’s clear that Microsoft is trying to influence small and midsize organizations – which make up the vast majority of businesses worldwide – with these pricing changes to force your hand and move to its cloud-based products and services. These increases make moving to cloud subscriptions and utilizing hybrid license rights more attractive, and aligns with Microsoft’s ongoing cloud-first strategy.
Recommendations For Negotiating
Your Microsoft Enterprise Agreements
Here are four important recommendations as you take these pricing increases into consideration and negotiate your Microsoft contracts:
Analyze the cost of multiple renewal options that include EA, MPSA and CSP, or alternative options. Understand that pricing for online services under MPSA and CPS are only protected for up to 12 months, vs three years under an EA.
Determine if an early EA renewal would be acceptable for smaller Level A customers, with limited leverage and contracts expiring up to three months after October 1, 2018.
Decide before October 1, 2018 if you will purchase products via Open/Open Value to avoid programmatic and product price increases, and evaluate pricing for online services under CSP.
Analyze the need to renew SA when running primarily software on-premises, leveraging dual-use rights available through Microsoft 365 and alternative solutions from other providers.
While there are fewer things certain in life than death, taxes, and Microsoft price increases, you can control how much you are paying for enterprise IT services and Microsoft Unified Support to ensure you’re maximizing your Microsoft investment and meeting your business needs.
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