Tips for Microsoft Negotiations

Understand key differences under Unified to avoid common pitfalls at resubscription

Understanding the complexity of Unified Support is paramount to protecting your organization’s technical capabilities and precious IT budget. For some, a shift from Premier to Unified’s unlimited support hours is worthwhile. For others, massive formula-driven price increases and deteriorating service quality have become a growing liability.

Pay attention to these details

  • Big $ increases years 2 and 3: Make the MSFT account team do 3-year comprehensive cost projections based on your roadmap.
  • License-only penalty: If you purchase License-only software without Software Assurance (SA), Unified pricing is punitive. MSFT uses a one-year look-back for all Cloud services and SA, but a five-year-look back for License-only software. Also, License-only spend is charged at 10% of the entire spend vs. 10% of SA, which can mean a 3x-4x up-charge.
  • Hidden fees: DSE hours and engineer-led proactive support credits (optional for additional fees) get a 30% up-charge added automatically for “TAM time.” These charges often are buried in the fine print of your Unified quote.  Make sure you are looking at the REAL cost of the add-on services.
  • Check the math and itemize: It is not uncommon for the details going into the Unified pricing formula to be incorrect. Also, make sure pricing is separated into “base” and “add-ons”, with add-ons (such as proactive credits) itemized. Make sure it details the number of any SAB credits used as well.
  • Press on Security: Microsoft suffered a large breach in Dec 2019 exposing over 250 million Premier Support client records. Press the Microsoft sales team on how they keep your data secure, particularly with overseas 3rd-party vendors. Even if its not operational data, ticket details and emails about potential vulnerabilities discussed with engineers overseas pose a risk.
  • Beat the clock: If you’re too close to a resubscription date to perform due diligence, ask MSFT for a 30-day extension (which are being granted more often).

Audit Your Support Agreement

  1. Ask for a full list of contracts, including itemized products, and the Unified Support allocations for each. Make sure all the contracts are for your organization, are correctly classified, and are currently being used. Mistakes can and do slip though.
  2. Confirm that your organization actually has all the software / licenses listed and that the entire entity has access to the support services. Conversely, pay attention to any other divisions or organizations that are included in your EA, but that may not be a part of an internal shared support agreement.
  3. Ensure that the Microsoft products you are subscribed to have not been double counted. For example, if you move from Microsoft Office suite to M365 (formerly O365) you shouldn’t be charged for Office license support.
  4. Clarify for M365 what percentage is allocated toward User costs vs. Server costs which are up to 25% higher. It should be a 75% / 25% split, respectively. If those allocations are incorrect, it can have a huge impact on costs.
  5. If you have true-ups, ensure that you are not inappropriately charged for the corresponding support. True-ups are primarily the cost of the licenses and should not be included at 100% of spend in the Unified calculation. Also, Software Assurance paid in true-ups should be spread evenly across the term of the true-up.
  6. Check that multi-year Azure agreements are charged against Unified appropriately. For example, a 5-year agreement should be charged 20% per year, not the entire 5-year amount at one time or the amount consumed in any one particular year.
  7. Microsoft offers private discounted Unified rates for enterprise customers buying large and/or multi-year Azure contracts. Verify that these public cloud support rates are competitive with the other competing public cloud support tiers and rates from Amazon and Google when support costs are included in the comparison.
  8. Microsoft Unified Support contracts and proposals are based on past MSFT spends, but you can and should negotiate on future trends. Look-back based proposals are a good deal for growing customers, but not if an organization is contracting.
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