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  1. Hardware
September 26, 2018

Microsoft 10% Price Hike Just 5 Days Off

"Many customers in both the private and public sector will feel the pain of the price adjustments... especially those who are not measuring their software usage and reconciling it against what they are paying for"

By CBR Staff Writer

If your business is running Microsoft Office on-premises, rather than using the cloud-based Office 365, be warned: you are about to get stung with a 10 percent price hike, which will also extend to on-premises Microsoft server products such as Exchange Server, Skype for Business Server, SharePoint Server and Project Server.

Microsoft announced the price adjustments in late July. It is effective October 1.

microsoft price increasesOffice 2019 commercial prices and server products both get a 10 percent hike over existing prices.

This includes, but isn’t limited to Enterprise CAL, Core CAL, Productivity Servers, Windows Server 2019 Standard edition, and RDS Per Device CAL – increasing [pdf] 30% to match the Per User price.

The company’s rationale is that: “Our traditional licensing business is based on a low variable cost environment, where a price waterfall, discounts, and promotions are used to sell on-premises software.”

“However, the growing cloud business has pricing based on number of users or service meter, availability, and/or consumption of the product or
service. Pricing for cloud and on-premises don’t align well, nor do programmatic volume discounts align with cloud pricing models, and we aim to correct that.”

Microsoft Price Increases: “Many Customers Will Feel the Pain”

Matt Fisher, SVP product strategy, Snow Software, told Computer Business Review: “With Microsoft running in nearly all enterprises, many customers in both the private and public sector will feel the pain of the price adjustments… especially those who are not measuring their software usage and reconciling it against what they are paying for.”

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He added: “There are benefits associated with a move to Microsoft’s cloud-based products, but if your organisation isn’t set up to take advantage of them, you could find yourself missing out on opportunities to improve infrastructure efficiency as well as optimise and consolidate licensing.”

See also: Enter the Snowball: A Snapshot of a Cloud Migration 

His tips to ensure Microsoft customers only pay for what they are actually using and mitigate unbudgeted spend ahead of the Microsoft price increases include building an accurate view of your estate to help you determine what licensing you need to keep on-premise, who can be moved to the cloud and what services or licenses you can stop purchasing.

“Leverage your IT/ Software Asset Management (SAM) practice to get a snapshot of your environment, then plan accordingly for the migration.”

He adds: “For some, this will be the tipping point to finally embrace a true SAM practice. If your current plan is to work through a cluttered CMDB export or spreadsheet, you’ll struggle to generate the data you need to make an informed business decision.

“The price changes make it more important than ever that the right users have the right licensing and subscription plans in place – be sure to have an efficient process to effectively monitor your cloud subscription usage. Implement a process to manage subscription changes for those joining and leaving your organisation, and for those that change roles internally as they may not need the same subscription levels as before.”

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