If you’re one of the thousands of enterprises using Microsoft software and services to power your business, chances are you are in the midst of renegotiating your support contract in a new Microsoft Unified Support world.
Last year, Microsoft rolled out its biggest change to its support structure, shifting its Premier Support customers to Unified Support. There are unlimited reactive support hours and there are three levels – Core, Advanced, Performance – which have a minimum contract size of $25,000, $50,000, and $175,000, and pricing based on a percentage of Office 365 annual costs, client software annual costs, other software and online annual costs.
Getting transparent pricing and understanding what is behind the calculations for Unified Support has been hard to come by – without a standard price list, companies are often one step behind in negotiations with Microsoft when it is time for renewals. While we wrote about Microsoft Unified Support price lists published by several public sector entities as required by law, it’s still hard to use that as a template for how much you could expect to pay.
Many companies are getting sticker shock, as research from several industry analyst firms shows the transition to Microsoft Unified Support adds a 30% to 50% cost increase for most Microsoft Premier Support customers.
What’s behind the Unified price increase?
More information has come out that sheds a little light behind how Microsoft used to come up with a dollar amount in the Premier Support world, and how that’s shifted now with Unified Support:
Microsoft Premier Support Calculations: Microsoft carried out a needs assessment based on your specific needs. After this assessment was completed, Microsoft would offer reactive services or, if needed, proactive services. The downside to you here was that reactive services also increased with each proactive service. Bottom line: This method of calculation added more cost within the terms of your contract.
Microsoft Unified Support Calculations: Forget a needs assessment tailored to your specific needs. Now, Microsoft is looking at how much you’ve spent on all licenses over the last five years – and the sum of online services from the prior year – to calculate a one-year contract. Three contract types would then be offered: Core Unified Support would be 6.5% of the license sales and would not include Technical Account Manager (TAM) support and exclusively online solutions. Advanced Unified Support would be 8% of the license sales and would include a TAM and creation of a cloud plan. Performance Unified Support would be 10% of the license sales and give you slightly faster reaction times and more support for your cloud computing needs. Bottom line: Microsoft Unified Support is all about how much money you’ve spent in the past – not about what your support needs will be in the future.
Unified prices going up while service level is going down
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 EA, SA, and Support renewal conversations as well as provide you alternatives to Microsoft’s ever-increasing price tag for its services. Make sure they can bring the high level of MSFT support you need for your business-critical infrastructure.
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.