Is Microsoft Premier Support worth the 30% to 60% price increase? For some large enterprises the answer appears to be yes. For everyone else, the answer is no.
Some Large Enterprises Embrace Premier Support Price Increase
With Microsoft’s move from Premier Support’s model of paying for a bucket of hours to the new Unified model of “unlimited tickets”, some large enterprises are embracing Unified and its cost increase. The Fortune 50 are slashing and outsourcing their IT workforce and service / help desk and escalating more tier 1 and 2 support tickets to MSFT. In this manner they are able to justify the 30% to 60% Microsoft support price increase.
Small and Medium Enterprises See Diminished Value in Premier
Small and medium enterprises are not having the same experience with the Premier Support price increase as the Fortune 50. They don’t have the massive IT budgets of their larger brethren, so they aren’t able to offset the significant budget requirement with a workforce cut or outsourcing. Furthermore, over time the Microsoft support experience has deteriorated with offshoring, delayed response times and broken SLAs. And with Microsoft Unified model being based on a percentage of Cloud service consumption, many small and medium enterprises aren’t able to easily predict their future Microsoft support costs and budget appropriately during this time of rapid cloud adoption.
“US Cloud is seeing unprecedented urgency from Global 2,000 and Fortune 500 organizations to switch from Microsoft Premier/Unified support to US Cloud Microsoft support services.”
Robert E. LaMear IV, CEO, US CLOUD
SMB, Education and Local Government Can No Longer Afford Premier
For everyone else, Microsoft Premier Support simply isn’t a viable option at 30-60% more. Small and medium businesses, school districts and universities, local government and municipalities have all been deeply impacted by Covid-19. They are each being forced to cut IT budgets dramatically to survive. There simply is no room for a price increase in Premier or paying for services they don’t use in Unified.
Most Organizations Think Premier Better Value Than New Unified Model
If you use Microsoft software and services to power your business, chances are you’re also a Microsoft Premier Support customer. These systems and services are critical and require urgent attention to any issues, escalation and resolution of problems. Now, Premier Support customers are being asked to renew with a new offering – Unified Support – which Microsoft says will bring all support for online and on-premises products into one single agreement.
With Premier Support, you purchase a block of hours for different categories of support, such as Proactive and Problem Resolution Support (PRS) – a more flexible, customizable model to fit into your specific needs. With Unified Support, you will pay a percentage of your annual licensing costs for unlimited PRS and unlimited electronically delivered proactive support. The annual cost for Unified Support is 6% to 10% (depending on the level of Unified Support selected) of Office 365 and client software annual costs, and 8% to 12% of other software and online services annual cost.
So what does that mean for the vast majority of Microsoft Premier Support customers today? You won’t need to estimate/track hours, but if you’re a typical organization paying around 7% of annual Software Assurance cost for Premier Support, you will pay 30% to 60% more at Microsoft. If you think this is normal across office software and services vendors, think again: This change will mean those paying for Microsoft Support will pay 33 to 39 percent of licensing costs for maintenance – significantly higher than the industry standard 18 to 25 percent today.
Growing MSFT Cloud Consumption Equals YOY Increases in Support Costs
Basing support charges on annual product and service spending allows MSFT to charge for support of its online (cloud-based) products – which will increase costs for products like Office 365. You may have to spend more to support Office server workloads running in Microsoft’s data centers than when you hosted them yourselves. Doesn’t that defeat one of the biggest purposes of cloud computing, which was cost savings?