Using effective Software Asset Management to manage Microsoft CSP price increases.
Price increases are of course impactful, but I believe the focus should also be on the reality of the situation and how customers will continue to receive increased value from their Microsoft investment for what has been, in real terms, a comparative price decrease. So, here is my view on the recent Microsoft announcement.
The Evolution of Office 365
Since the launch of Office 365 10 years ago, Microsoft has taken a fundamental set of baseline products and services (email online, cloud storage, Office applications) and consistently evolved, enhanced, and expanded the offering.
It now includes 24 additional applications and services and more than 1,400 new features, including Microsoft Teams, PowerApps and Azure Virtual Desktop.
This is all designed to deliver incredible value through an operational cost model that enables you to effectively choose and align different product sets (subscriptions) with specific user personas, roles, and the needs of your business.
Microsoft’s Digital Vision
The Microsoft Cloud Solution Provider (CSP) reseller channel was established by Microsoft to help organisations maximise the return on their subscriptions investment and realise the true benefit through effective planning, deployment, and delivery of suitable technology to meet your needs.
This has been enabled through the direct relationships between expertly qualified Microsoft CSP partners and customers and has evolved and matured towards fulfilling Microsoft’s vision:
‘To help customers digitally transform by making it easier for them to buy and manage cloud services through a streamlined digital customer agreement, consolidated management portal, and enhanced invoicing and cost-management capabilities.’
With the public announcement of the first price increase to Microsoft subscriptions in 10 years, the true value and worth of Microsoft CSP resellers must now come to the fore and be evidentially demonstrable.
A simplistic view could be to dismiss the price increase as ‘just one of those things or, if slightly more cynical, as predictably inevitable now Microsoft has securely established the subscription model as a primary purchasing motion.
What do the pricing changes mean for you?
However, a more objective opinion can be formed by looking at the detail and understanding the context of the changes and how this may impact you.
The new price increases are applicable to existing rolling, month-to-month Office 365 and Microsoft 365 subscriptions from March 2022. What does this mean?
· Effectively, from March 2022, if an existing customer does not want, or is unable to commit to a fixed quantity of subscriptions for less than 12 months, there will be a premium added to the cost of doing business.
· However, for an annual commitment to a fixed number of subscriptions, there is no increase when compared to the cost of today’s subscriptions.
· This does not remove the ability for customers to retain the freedom of flexibility to increase or decrease subscriptions, which they currently benefit from.
Many of you will have periods of fluctuation over a 12-month timeframe; flexibility can still be retained by committing annually to the known fixed number of subscriptions the business needs at the pre-increased pricing level, and then add subscriptions upon demand and for the short-term period required at the slightly higher cost per month. These subscriptions can then be removed month-on-month without penalty.
The March 2022 price increase will then only be applicable to the subscriptions consumed for less than 12 months.
Full flexibility will also be retained for upgrading one, some or all Office 365 and Microsoft 365 subscriptions to a higher suite.
For example, a customer who subscribes their users to Microsoft 365 E3 can, at any time and without penalty, upgrade some or all users to Microsoft 365 E5 suite to take advantage of the added products and services available (i.e., Power BI, Microsoft 365 Phone System or enhanced security and compliance features and functionality).
The fundamental principles of good Software Asset Management will not change, but perhaps the importance of combining the expertise of people, effective operational processes, and the ability to deliver technology aligned to the needs of a business will become more so.
To touchback on the point of Microsoft CSP resellers demonstrating value to their customers: transacting subscriptions may be all that a business requires of a CSP partner, purely serving as a means to an end.
However, for your business to maximise its return on investment, you should effectively plan for both changes and the continued use of products and services. Additionally, to leverage the optimal benefit through effective license and subscription alignment, allocation, and adoption, it is recommended to engage with a Microsoft CSP partner with the understanding, experience, and expertise to help plan, deliver and deploy the most effective subscription and licensing solutions to meet the current and future needs of your business.
As a Microsoft CSP and experts in Microsoft licensing, we can advise and guide you on the appropriateness of CSP for your business and offer the full CSP lifecycle for optimal cost management and license compliance. Contact us if you have any questions or go to our website for more information.
About The Author
William Nelson is a Microsoft SAM Sales Specialist here at Version 1.