Data Centre & Cloud

Time to Wise Up as Microsoft gets Tough on Pricing

EA discounts pulled and an 18% price rise imminent – but there is something you can do!

Price rises and EA discounts being pulled … licensing costs could increase by 35% … but there is something you can do!

By Matt Gifford, Microsoft Practice Lead at VCG

In this article I deal with the Microsoft price and Enterprise Agreement changes coming up in March 2023, and how to optimise your costs going forward.

Managing Change

To avoid Microsoft licence price rises at the start of 2022, many organisations signed new agreements ahead of the date to lock-in their existing discount for a further 12 months. It was an obvious thing to do, and it bought time to examine workforce licensing requirements in more detail.

But ‘kicking the can down the road’ means that eventually, you’ll catch up with it again – and that moment arrives in March 2023, and the start of the new fiscal year.

What this means for you …

Absorbing an 18% licensing price rise will be extremely unwelcome, coming – as it does- at a time when operating costs are soaring for all organisations, but to add insult to injury, we’ll be stung by a Microsoft ‘Double Whammy’, as there are wider changes and cost increases to swallow.

Microsoft Enterprise Agreements (EAs) provided a simple broad-brush option for organisations to access discounted licence costs. And whilst many companies intended to look more closely at services they were needlessly paying for, most didn’t – due to the notion that the discount they were receiving was sufficient.

Changes coming in January 23 mean that to qualify for a new EA, organisations must have over 2,400 users, and Microsoft now aim to deal directly with those larger organisations. If you have 2,399 users or less, then Enterprise Agreements are a thing of the past.

The 18% price hike will hit everyone, but simultaneously losing an EA discount will mean an increase in prices for many of around 35% in real terms.

Good News

For small and medium businesses (SMBs), the good news is that by working with an accredited Microsoft partner, known as a Cloud Solution Provider or CSP – you can still take advantage of discounted Microsoft licensing options.

Furthermore, it’s the perfect time for IT and purchasing managers to forensically examine the services they’re paying for. Managing complex licensing requirements has long been a tortuous experience, leading many companies to wave the white flag and put everyone the same deal, whether they need it or not.

Many CSPs simply managed the ordering and ceasing of licences and Large EA Partners also handle the annual ‘true up / true down’ process, to ensure that things were kept on an even keel.

We take a more proactive approach with our clients by finding the most appropriate commercial options and blends from the vast array of licensing deals available.

Keeping a close watch on market changes, and anticipating future issues and challenges is key to the value we add, and it’s always been core to our approach – and if alarm bells are ringing about your current arrangements, then perhaps we should have a conversation sooner rather than later.

A thorough understanding of the intricacies of licensing is a pre-requisite, and by working closely with clients to fully understand their operational needs, we tailor licensing packages to drive optimal productivity and value.

Key Takeaways

Many tariff plans and packages are not widely publicised or promoted, and blending options based on workforce need is the key to competitive licensing costs.

To optimise investment, it’s essential to monitor licensing throughout its lifecycle, not just at the point of renewal, and our on-going managed services and commercial health checks typically reduce licensing spend by around 45% – and we have the examples to prove it.

Having day-to-day involvement in licensing means we’re constantly watching and monitoring developments across the spectrum, and we do the aforementioned forensic examination for you, based on your specific requirements.

Optimising licensing costs is just one the services we provide and our Microsoft practice covers all aspects of collaboration, security, Azure cloud services, networking, and wider accredited IT services from global leading partnerships.

If you’d like an informal business conversation with me about any aspect of Microsoft business collaboration suite licensing, or any other aspect of IT services, then please contact me directly, I’ll be delighted to help you.

Click here to read more about our Microsoft services.

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