Autumn Licensing Forecast: Price increase for Microsoft products

Organizations that have chosen to stay away from the Microsoft cloud should consider reviewing their decision, since the prices for additional on premises licenses will only go up.

Microsoft announced that the prices related to its volume licensing programs and on premises software programs will increase as of October 1st (2018). However, the price updates are already made available for preview starting with the September pricelist. This move reiterates Microsoft’s “cloud-first” strategy and doesn’t come without consequences for its customers.

These changes (as stated by Microsoft) are specifically aimed to:

Establish a single, consistent starting price across all programs aligned to web direct for online services (e.g. Microsoft Azure, Office 365)

Remove the programmatic volume discounts (Level A and Open Level C) in Enterprise Agreement (EA)/EA Subscription, MPSA, Select/ Select Plus, and Open programs (Open, Open Value, Open Value Subscription)

Align government pricing for on premises and online services to the lowest commercial price in EA/EAS, MPSA, Select Plus, and Open Programs

Deliver a newly designed Customer Price Sheet that better outlines how a customer’s price was derived (direct EA/EAS only)

What does this mean for you?

Getting informed is the first step you can take to make educated decisions for your organization. In the following sections we will explain what these changes entail and how they can affect you.

Consistent pricing

Level A Enterprise Agreement (EA) customers (customers with 250–2,399 computers) will no longer benefit from an automatic price discount. The starting price will be the same for Enterprise Agreement enrollments as well as for web direct for online services (OLS). Enterprise Agreement customers will still be able to negotiate a lower pricing depending on additional criteria such as platform and coverage (e.g. Windows Enterprise Upgrade).

Removing programmatic volume discounts

The level C discount will be completely removed from all Open programs. This will lead to a price increase of 2% (for Level C; Open Value Subscription, Open License and Open Value). Prices will be increased by approx. 4% for Level A for Microsoft Products & Services Agreement (MPSA), Enterprise Agreement and Select / Select Plus Agreements.

Government price alignment

The Volume Licensing prices for government organizations are going to be aligned to the lowest commercial price for each program. Thus, Online Services (e.g. Microsoft Azure, Office 365) will see a price increase of 4-6% at discount Level D. Open & MPSA programs prices increase between 3-18% for the Online Services offering.

Delivering a newly designed Customer Price Sheet

The new Customer Price Sheet relates to changes for Office, Windows Server and Windows 10 products.

Office

The release of Office 2019 comes with a 10% spike in price. This price increase will be reflected in Office client programs, Office server products and the related Enterprise Client Access License (CAL) and Core CAL bundles. This affects all commercial and academic agreements, with the exception of Enrolment for Education Solutions (EES) agreement. Although not related to the price increase, it is important to mention that Office 2019 will come with a 7-year support lifecycle (rather than 10) and will only run on Windows 10.

Windows Server

The price of Windows Server 2019 Standard edition will also increase by 10%.
Remote Desktop Services (RDS) Device CAL pricing will align with the User CAL and will see an increase of 30%.

Windows 10

The offer changes for Windows 10 include:

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.

Windows 10 product names are going to change as follows:

Windows 10 Enterprise E3 per User àWindows 10 Enterprise E3

Windows 10 Enterprise E3 per Device àWindows 10 Enterprise

Conclusion

All these changes are part of the Modern Commerce Journey, having the end goal of achieving a single Modern Commerce platform which will be simplified to only three distinct purchasing channels:

Partners

Self-service

Microsoft-assisted

Alex is a Software Developer with software licensing and technical data analysis background. In the past he focused on the execution of technical analysis related to software deployment and usage data, being specialized in Progress OpenEdge, RedHat and Microsoft enterprise software programs. Alex now leverages the licensing knowledge gathered since he started his career in licensing in 2011 to automate manual analysis processes in our internal Zyncc Analysis Engine.