From 1st January 2017 Microsoft will be introducing important changes to its pricing structures for enterprise software and cloud services.
In a response to the falling pound, Microsoft will increase its GBP pricing in order to harmonise software and services prices within the EU/EFTA. Regrettably these increases are imposed, and it is important to note that service providers will benefit in no way from the implemented increase.
How much will prices increase?
To realign to Euro levels, from 1st January GBP prices for on-premise enterprise software will increase by 13 per cent and enterprise cloud prices will increase by 22 per cent. For example:
- Cloud Hosting Licensing (SPLA purchased through IT Lab as hosting provider) is expected to increase by 13 per cent
- On-premise licensing is expected to increase by 13 per cent
- Office 365/Azure is expected to increase by 22 per cent
Who will be affected?
All users of relevant Microsoft services will be affected. Purchases under new contracts and new product additions will be priced as per the price list at the time of order.
However, these changes will not affect existing orders under annuity volume licensing agreements for products that are subject to price protection. If you’re a customer with an Enterprise Agreement, for example, you will have price protection on previously ordered enterprise software and cloud services. Consequently, there will be no price change throughout the duration of your agreement.
Users with cloud commitment subscriptions, such as Office 365, will also be exempt during their subscription term. This is typically 12 months from the beginning of a paid subscription.
It goes without saying that this is an unwelcome pricing structure, for both users and service providers. However, the role of IT Lab and other service providers is now to identify where compensating savings could be made, and how a business’ investment in technology can be better utilised to continue to deliver value for an organisation.
The role of technology in businesses is more important now than ever, and the very nature of subscription and cloud-based solutions provides businesses with a whole host of options.
If you have any queries or concerns regarding the new pricing structure for Microsoft customers, please get in touch with the IT Lab team or your account manager.
The official Microsoft blog post is available here: microsoft.com/uktechnet/2016/10/21/important-volume-licensing-update