How Much Does Microsoft Unified Support Really Cost?
HOW MUCH DOES UNIFIED SUPPORT REALLY COST?
Unified Support’s unlimited Microsoft software support initially looks attractive but often results in significant cost increases for enterprises. Unified Support is forecasted to cost 2-5x more than Premier over the next 5 years and a 7-9 % increase in most Enterprise Agreements (EA).
Initiatives: Negotiating Microsoft Contracts | Strategic IT Cost Optimization
Audience: CIO and IT Executives | Sourcing, Procurement and Vendor Management
How is Microsoft Unified Support Cost Calculated?
The Unified Support Core Plan has a minimum cost of $25,000 and includes 6% of your Microsoft 365 spend and 8% of your Azure and Dynamics spends.
The Unified Support Advanced Plan has a minimum cost of $50,000 and includes 8% of your Microsoft 365 spend and 10% of your Azure and Dynamics spends.
The Unified Support Performance Plan has a minimum cost of $175,000 and includes 10% of your Microsoft 365 spend and 12% of your Azure and Dynamics spends.
Table data sources: Microsoft Q4 FY2022 Cost for Unified and Premier Support, US Cloud Premier Support Pricing Q3 2022
5 Year Unified Support Forecasted Cost
At least 3 months prior to your Unified renewal, conduct an audit on the renewal proposal in order to fully understand how the price is calculated. Your audit rights allow you to see and fully understand the look-back over a 3-5 year timespan.
Ask for the information as spreadsheet, not a PDF. The information should include: contract number and type (Enterprise Agreement, MPSA, etc…) and a detailed list of every product in the contract, annual cost, and type.
Once you have a handle on what Microsoft products and services you need and that drive your Unified Support cost, put them in a spreadsheet and apply anticipated growth across the various products for 5 years.
In addition, forecast SAB credits and SA discounts that will be lost in 2023. This analysis will allow you to arrive at an effective Unified Support cost forecast for your enterprise.
Currently, analysts have both Amazon and Microsoft stocks as strong buys due to one singular demand from enterprise customers: datacenter consolidation.
According to Microsoft, datacenter consolidation and migration helps customers reduce costs, improve service levels, and drive business agility.
More granular benefits include reduction of CapEx and OpEx expenses, standardized technologies, reducing VM server sprawl and migration to Azure-based private or public IaaS.
As IT leaders consolidate data centers to speed up their digital transformation efforts and meet CFO cost reduction mandates, they are seeing their Azure consumption increase significantly as they close datacenters and move their data to Azure. In doing so, Unified support costs are rising also.
Microsoft Unified Support Immediate Cost Reduction
Sourcing, Procurement and Vendor Management (SPVM) are incentivized to reduce existing IT costs as part of the CFO mandate to the CIO to continuously optimize IT costs.
In the midst of economic uncertainty, many industries are looking for ways to rapidly cut IT costs and use the savings to reinvest in growth.
Third-party Microsoft support is a Gartner recognized IT cost saver and particularly compelling when overlaying 5 year Microsoft-centric IT roadmaps and skyrocketing Unified support costs.
Microsoft Unified Support Future Cost Avoidance
CFOs value cost avoidance above all else because it maintains budget needed for strategic IT investments that drive new growth.
Industry-leading Sourcing, Procurement and Vendor Management (SPVM) are keenly aware of this mindset and give cost avoidance priority when looking at sourcing new IT vendors. Those IT vendors that can both avoid new costs and reduce existing rise to the top.
66% of companies surveyed now expect to pursue IT cost avoidance strategies this year, up from just 38% pre-recession. – Deloite
Gartner research shows that leading companies take a proactive and strategic approach to cost optimization — strategically cutting existing and avoiding new costs while funding growth at the bottom of the business cycle.
This approach better equips them to sustain through headwinds and unknowns — and pull ahead amid and beyond the uncertainty and disruption of crises like the global recession.
Unified Support Cost Case Studies
Small Enterprise Case Study – 1.7x Unified Cost Increase
Scenario: Regional healthcare provider with non-profit cancer research arm moved its on-premise data warehouse to Azure for more efficient machine learning around its cancer research efforts. After performing its due diligence, the organization moved to third-party Microsoft support provider US Cloud after 1 year of Unified support.
Unified Support Cost Reduction Year 1: 31% Unified Support Cost Avoidance Years 2-5: 142%
Large Enterprise Case Study – 5x Unified Cost Increase
Scenario: Fortune 500 bank consolidating data centers and moving production VM workloads to Azure. The bank kept its 3 main geographically dispersed data centers for disaster recovery and off Azure network backups. After 5 year forecast analysis, the bank replaced Microsoft with US Cloud after 2 years in Unified.
Unified Support Cost Reduction Year 1: 43% Unified Support Cost Avoidance Years 2-5: 461%
Microsoft Unified Support Renewal Cost Sky Rockets
Organizations who have transitioned from Microsoft Premier Support to the new Unified model are now finding themselves faced with significant cost increases at their Unified Support renewal.
It’s important to understand why the cost increase is hitting hard and why the increases will continue into the near future.
Software Assurance Credits for Microsoft Unified Support
The first reason enterprises are being hit with steep 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 were applied to your Unified Support bill.
Why aren’t there any more Microsoft Support discounts available?
Microsoft Enterprise Sales teams knew that most Premier customers would see costs increases somewhere between 30-60% and as result, they creatively rolled all SA credits into the first year of Unified to offset the cost increase. In the past, SA credits were spread across the life of an Enterprise Agreement (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.
The second important factor of sky rocketing Unified Support renewal costs is that renewals will continue to increase for the next 3-8 years for most Microsoft enterprise customers. The reason is simple. Unified Support is based on the amount of Cloud services you are consuming at Microsoft. And that consumption is spread across the life of your EA.
2019, 5 Year Microsoft Enterprise Agreement (EA) Renewal Tied to Unified Support
Let’s look at an enterprise with a 2019, 5-year Microsoft Enterprise Agreement (EA) renewal who has recently rolled out Office 365 to its user base.
Year 5 – 2018-19
Year 4 – 2017-18
Year 3 – 2016-17 – Office 365 rollout to entire enterprise
Year 2 – 2015-16 – Office 365 pilot program
Year 1 – 2014-15
The above enterprise will see a big uptick in the Unified Support cost renewal in 2019 due to the increased Office 365 subscription, but the lookback baseline only affected roughly half of the prior Enterprise Agreement. The second 5-year Enterprise Agreement renewal in 2024 will see yet another Unified Support uptick as the baseline now covers all 5 years of Office 365 consumption.
2024, 5 Year Microsoft Enterprise Agreement (EA) Renewal Tied to Unified Support
Let’s look at the same enterprise with their 2024, 5-year Microsoft Enterprise Agreement (EA) renewal who has recently rolled out Azure for its production IT infrastructure needs.
As a reminder, they have successful rolled out Office 365 to all its users in 2016 and will see the full weight of its Office 365 consumption in its EA and Unified Support cost increase in 2024.
Year 5 – 2023-24
Year 4 – 2022-23
Year 3 – 2021-22 – Azure rollout to enterprise production
Year 2 – 2020-21 – Azure pilot program
Year 1 – 2019-20
With the addition of Azure, the above enterprise will see another increase in their EA/Unified Support renewal in 2024 and yet another increase in 2029 as they see the full weight of their Azure consumption hit both their EA and Unified Support bills.
Conversion of Software Assurance 24×7 Problem Resolution Support Incidents to Premier (Unified) Support Services
With the exception of MPSA, Customers may convert SA 24×7 Problem Resolution Support Incidents (SA PRS Incidents, or “SAB”) to Unified Support, Premier Problem Resolution Support (PRS) hours or Dedicated Support Engineer (DSE) hours (applicable for reactive support activities only).
These services are for use consistent with their Premier Service or Unified Support plan at the time of transfer. The convers ion is based on a local rate calculation that will be provided by their Premier Account Team. Customers may be required to purchase additional Support Account Management hours before converting SA PRS incidents. SA PRS incidents that are converted to Premier are considered Premier Problem Resolution Support hours and are subject to the Premier Services Description. Once converted, incidents cannot be returned to Customer’s SA allowance.
Additional Business Provisions for Microsoft SA Spend and Unified Support Renewals
SA spend may not be combined across Select or Enterprise enrollments, Select Plus registrations, Purchasing Accounts, or Open Value Agreements to qualify for additional awards. Spending within each enrollment, agreement, or Purchasing Accounts will be used to determine the award for that enrollment, agreement, or Purchasing Accounts.
Reduction of SA Spend as a result of returns and other billing adjustments, where allowed, may result in the loss of Support eligibility or Phone incident awards during the present or future award periods.
As you approach your Unified renewal with Microsoft, here’s your game plan:
Understand what is offered in each tier of Microsoft Unified Support and determine if it would meet your specific needs. US Cloud has broken down each level of Microsoft Unified Support service for you to help get you started.
Follow our eight Microsoft enterprise negotiation tips leading up to and during your conversation with your Microsoft account manager. The shift to Microsoft Unified Support has also changed the way Microsoft approaches renewal conversations with you. Follow our Microsoft enterprise renewal tips now so you don’t get left behind.
Look outside Microsoft for opinions on pricing and services. You don’t have to go it alone. There are a variety of ways to license/subscribe to Microsoft’s offerings and get support. Bring in unbiased expertise to assist you our sourcing team with vetting the recommendations and helping structure Enterprise Agreements (EAs), Software Agreements (SAs), and Support agreements that drive lower spend and higher utilization.
US Cloud can help you prepare for your Unified Support, EA and SA renewal conversations as well as provide you alternatives to Microsoft’s ever-increasing price tag for its support services. Make sure they can bring a high level of quality you need for your business-critical support, such as:
Hours that never expire – Your support hours never expire with US Cloud, and since you’re only paying for the support you need, it allows you to make a smarter financial decision for your business without sacrificing quality.
Billing on your terms – US Cloud offers subscription billing and installment options that meet your specific needs.
5x faster response – Microsoft Unified Support average response times hover around 30 minutes. US Cloud will respond to your ticket in 6 minutes.
A white glove customer experience, every time – US Cloud won’t make you repeat your issue over and over again when we transfer you to the right experts to solve your issue. Our only goal is your complete satisfaction.
Deep expertise in your specific business needs – Dedicated Technical Account Managers and Designated Service Engineers at US Cloud mean we quickly develop a robust understanding of your business and IT environment. You can depend on us to handle your specific issues the moment you have them instead of wondering if the right person will be available to take your inquiry and rectify your support inquiry.
USA-based support – You will never be outsourced to a call center overseas. All US Cloud staff are located in St. Louis, Missouri, and meet the right levels of clearance for U.S. public sector entities.
Two decades of Microsoft experience – US Cloud is a Microsoft Certified Partner and Cloud Solution Provider, meaning we are experts in the ins and outs of Microsoft technologies.
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