Top 5 Tips to Negotiate a Microsoft Enterprise Support Renewal Agreement
Microsoft is switching its enterprise support customers from Premier to the new Unified model. While we’ve written at length throughout 2020 about what the change entails and what it could mean for your business, you may not have had a chance to investigate yet. As with many Microsoft enterprise customers, you likely have an annual agreement with renewal dates. These can be at all times throughout the year.
Microsoft Unified Support is part of Microsoft Enterprise Services enabling the digital transformation journey, fueled by the company’s expertise and experience. Their job is to help enterprises implement and adopt Microsoft products, services, software, and devices to solve, envision, and understand new possibilities for your business. With the new unlimited support model of Unified, this transition comes with an increase in the price tag. US-based companies are seeing cost increases from 30-50%, while some multi-national enterprises are seeing price increases of 60% or more.
Microsoft Enterprise Support Renewal – Preparation is Key – Consider These Points
Chances are that as you approach your renewal date, you will need to consider whether or not you stay with Microsoft Unified Support. First, you will need to be prepared to ask hard questions of your Microsoft account manager; recognize that Microsoft’s cloud transformation is also affecting the way they deal with enterprise agreement renewals. The vendor has always had a very structured hierarchy for approving deviations from standard pricing, terms, and licensing. Now, Microsoft aims to further standardize these practices through its Online Service Terms; a single, standard set of terms is replacing its multiple Product Use Rights documents for online services. This approach may be advantageous for Microsoft, but it could be trouble for you and your unique user environment.
As with any negotiation, you should be completely confident you’ve done as much background research as possible. That way, you can ask the right questions and get the right level of support for your business-critical systems at the right time. Here are five tips to consider when your Microsoft account manager calls you to negotiate your renewal:
Don’t wait until the last minute to renew. Microsoft is going to great lengths to get you to renew earlier in the quarter, including offering better pricing and discounts or allowing you to adjust contract dates.
Don’t just negotiate the price. To really lower costs, make sure you understand how your unique business requirements align with standardized terms (especially for cloud offerings), and which licensing and subscription programs best support your technology, business, and budget.
Stop viewing renewal negotiations as a one-time event. Your Microsoft account manager (or reseller) starts thinking about your next renewal before the ink dries on your current agreement. In fact, Microsoft follows a successful methodology for increasing spend within each of its customers. True-ups and software asset management engagements are common post-renewal events you should plan for, manage, and negotiate as diligently as a renewal.
Validate reseller or account representative’s opinion on licensing. There are a variety of ways to license/subscribe to Microsoft’s offerings. Your reseller, or even Microsoft account manager, may not be well-versed in them all. Bring in unbiased expertise to assist your sourcing team with vetting the recommendations and helping structure agreements that drive lower spend and higher utilization.
Be prepared for an audit. Most Microsoft enterprise customers are aware of the recent uptick in audit activity. If you haven’t recently experienced an audit, expect to undergo one in the next 12 months. Just as Microsoft brings its software asset management tools to the table, you should bring your own methods and tools to establish accurate deployment counts, compare them against entitlements to validate compliance, and skillfully interpret licensing programs, terms and conditions.
Optimize MSFT Support Costs Now to Emerge Stronger Than Competitors
Gartner has identified US Cloud as the only independent third-party support alternative to Microsoft. Enterprises can replace MSFT Premier/Unified with US Cloud and drop an immediate costs savings of 30-50% in year 1.