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Upcoming Microsoft Pricing Changes Effective Oct 1st 2018

Microsoft has been working towards their vision for a modern commerce transformation. Coming this October, Microsoft begins to make some programmatic changes across their Volume Licensing programs that relate specifically to their pricing and discounting.

Consistent Pricing & Removal of Programmatic Volume Discounts:

Effective October 1st 2018,:

  • Level A Programmatic discounts for EA/SCE/Select Plus and MPSA, and discounts on Level C Open/Open Value will be removed.

What does this really mean?

These changes are aimed at helping organizations purchase based on their needs, rather than price. A big driver here is also a move for more mid-market customers to look at alternative purchase methods like the Cloud Solution Provider rather than through small Enterprise Agreements. This was a factor in Microsoft’s raising of the entry level from 250 to 500 seats and I believe it is a factor again with this price levelling.

Price Increases:

The following perpetual products will see an increase in price: Windows Server (Standard and Enterprise), Productivity Servers (Skype for Business, Exchange and SharePoint), Enterprise CAL, Core CAL, and Office.

At this time we have seen guidance of the following increased rates:

  • Windows Server – not yet determined
  • Productivity Servers – approximately 10%
  • Office – approximately 10%
  • Core CAL and Enterprise CAL – approximately 10%
  • Windows Server RDS Device CALS – approximately 30%
  • Windows Enterprise E3 Per Device – approximately 14%

What does this really mean?

For some – this will not have an immediate impact. If you are currently purchasing under an Enterprise Agreement and still have years remaining on your agreement – then you have some time to determine your plans – and we can help.

For those purchasing these perpetual products under alternative methods, or with an upcoming EA expiration – it is time to start considering your options to minimize the impact. Again – we can help.

Additional Changes:

  • Windows 10 Enterprise E3 offers will be renamed
    • E3 will now refer to the per user offer only- Windows 10 Enterprise E3 per User becomes Windows 10 Enterprise E3
    • Windows 10 Enterprise E3 per Device becomes Windows 10 Enterprise
    • The price of Windows 10 Enterprise will be raised to match the price of Windows 10 Enterprise E3
    • Windows 10 Enterprise E5 per device will be discontinued

Microsoft has been continuously moving to a more user-based subscription model and this is one more step in that direction. Overall, these changes make it more difficult and more expensive for organizations to remain on-premises – although it can still be done. Those organizations that have made a choice to stay away from Office 365 may well find now is a good time to review that decision. For example, if it was because “on-premises still works” – is that worth an additional 10% on your Office bill, or would now be a good time to understand what would be needed to migrate to Office 365? You could offset some/all of the cost of the business transformation against the “saving” you’ve made by not being subject to the on-premises price increase.

More Information:

The purpose of these changes is to create a consistent and transparent method to procure licensing. This will make it easier for customers to compare pricing across purchasing channels and make sound business decisions based on the overall solution. Additionally, this will allow customers to realize the long-term cost-savings by moving to the cloud.

Microsoft’s goal with Modern Commerce is to:

  • Accelerate digital transformation with offers available in all the ways a customer buys
  • Build better contracting and pricing experiences
  • Connect the buying and selling processes

Please see review the link below to find out more information regarding the new pricing/products changes coming in October 2018 and please feel free to reach out to your dedicated COMPAREX Sales Rep for any questions or concerns you may have.

https://www.microsoft.com/en-us/Licensing/campaigns/modern-commerce.aspx

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