The Growing Cost of Microsoft Premier/Unified Support
THE GROWING COST OF MICROSOFT PREMIER/UNIFIED SUPPORT
Microsoft Premier/Unified Support Costs Growing Year Over Year 2023 – 2030
It’s important to understand why the cost increases are building year over year, why SA discounts have disappeared and how you can cut your Microsoft Enterprise Support costs by 30-50% to emerge from the economic downturn stronger than competitors.
Microsoft Premier/Unified Support Costs Building Year over Year
The number one metric being tracked at Microsoft for all business and enterprise customers is cloud consumption. If you are a Microsoft customer, all paths lead to Cloud and you are most likely partially down that path via Microsoft’s big 3 cloud services: Office 365, Azure or Dynamics.
As a quick refresher, your Microsoft Premier/Unified support cost is directly related to your Microsoft Cloud spend. So as your Microsoft Cloud Services consumption increases, so to does your enterprise’s Microsoft Support cost.
Unified Support Performance Plan – $175k minimum.
Charged as a percentage of your spending: (typically) Server 12%, User 10%, Cloud 12%
Microsoft Software Assurance Support Benefit Ended February 2023
Microsoft Software Assurance (SA) is a comprehensive program that includes a unique set of technologies, services, and rights for using a minimum of 5 Microsoft products for on-premise use (not Cloud). Software Assurance helps keep your business up to date and ready to respond quickly to change and opportunity.
2023-2027 MS Unified Support Pricing Forecast – 95% Cost Increase
With an average 50% transition cost to from Premier to Unified in 2023 + 9% YOY Unified cost increases in year 2024-2027, Government and Education organizations can expect a 19% increase per year, over the next 5 years for Microsoft Unified support.
2023-2025, Support Tied to 3 Year Microsoft Enterprise Agreement (EA) Renewal
Let’s look at an enterprise with a 2023, 3-year Microsoft Enterprise Agreement (EA) renewal who is moving to Azure for production Cloud loads.
Year 4 – 2026-27 – EA renewal
Year 3 – 2025-26 – Enterprise-wide Azure migration completed
Year 2 – 2024-25 – Cloud-ready apps migrated to Azure
Year 1 – 2023-24 – Azure pilot program
The above enterprise will see an uptick in the EA renewal cost in 2026 due to the increased Azure consumption in 2025. However, the Unified Support cost baseline resets annually, so Unified will grow steadily over the course of the EA and spike in 2025 (staying higher and growing) as Azure goes mainstream in the enterprise and compute and storage needs grow year-over-year.
Software Assurance (SA) Credits for Microsoft Unified Support
One reason enterprises are being hit with steep Microsoft Unified Support cost increases at renewal is that they have used all their available Microsoft discounts to keep costs down while transitioning to the new Unified model from Premier.
More specifically, all possible Software Assurance (SA) credits have been applied and are no longer available. See below for more details on the credits and how they are typically applied to your Unified Support bill.
Why aren’t There Any More Microsoft Support Discounts Available?
Many Premier customers may see cost increases somewhere between 30-50%when switching to Unified and as a result, SA credits are sometimes rolled into the first year of Unified to offset the cost increase.
In the past, SA credits were spread across the life of an EA – typically 3 or 5 years. So you would take 1/3 or 1/5 of your SA credits each year. Unfortunately, many organizations have burned all their discounts in the transition year to Unified and have no further discounts available until their EA renews again.
Double Down on Digital Transformation with Microsoft
We’ve seen analysts (i.e., Gartner, IBRS and Directions on Microsoft) recommending that enterprises double down on their digital transformation during the economic downturn to emerge as a leaner, more efficient organization.
A good portion of digital transformation is moving to Cloud based services – SaaS, PaaS, etc.- and, we remember the benefits of Cloud: scalability, CapEx to OpEx shift, and efficiency. If you’re reading this, the Microsoft stack is important to your enterprise and your CTO is marching you down the digital transformation road towards “Oz,”aka Microsoft 365, Azure and Dynamics. Don’t be surprised if your cadence picks up in 2024 to a hastened beat of the drum.
Optimize Premier/Unified Support Costs Now to Emerge a Winner From the Economic Downturn
Gartner has identified US Cloud as the only independent third-party support alternative to Microsoft. Enterprises can replace MS Premier/Unified with US Cloud and drop an immediate costs savings of 30-50% in year 1.
US Cloud rate lock guarantees the savings over time allowing you to emerge from the 2023 economic downturn with either fiscal or innovative victories in hand, turning recessionary lemons into lemonade and gaining greater control of your Microsoft Enterprise Support costs.
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