Price increases - What is Microsoft doing?

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Microsoft price increases

Microsoft has recently increased its pricing for all their main technologies like M365 E3 and all the other modern workplace solutions, with the exception of E5. What surprises us is that there has been hardly any pushback from customers!

This might be due to Microsoft’s smart packaging. “All the companies are increasing their prices, so we are too”. However, what Microsoft customers need to realize is that this was not the first price announcement, and it will definitely not be the last.

Update: Please note that Microsoft has recently already announced price increases for non-USD currencies, for example an 11% increase on the EUR pricelist.

Small fish in a big pond

Considering the state of the world, we foresee that the price increases will follow each other ever more rapidly. If you have not locked in your prices for the long-term, this could really affect you. Pricing will continue to climb and at ever larger paces in the coming years. We are already seeing the initial effects of this!

Many Microsoft clients feel that they are just a small fish in Microsoft’s very large pond and they can have little influence. As we’ve discussed in previous content though, companies usually deal with a local Microsoft subsidiary and in that pond they are probably a big fish. The general rule is if you have a dedicated account team, you are big, you matter to someone (at least your Account Manager).

In negotiations you are also dealing with the targets set by Microsoft internally. Each Account Manager has a target to meet, so they will work for it and hopefully that means they will work for you. No matter how big or small your organization is, don’t just swallow everything Microsoft tries to sell you. Don’t just roll over and take it.

What steps can you take?

There are several things you can do to mitigate the impact of future price increases:

  • Prepare, know your position, analyze your situation.
  • Ask yourself what you can leverage in your talks with Microsoft. For instance, can you use competing technology to your benefit?
  • Can you find a cheaper way to host your data than with Microsoft?
  • Are you able to optimize certain cloud subscriptions?
  • Can you lock-in pricing for a longer period of time?
  • Can you negotiate a not-to-exceed price? 

The options are endless, you just have to bring them to the table.

For even more information

If you want to learn even more, please visit our YouTube channel and our LinkedIn company page. Subscribe to stay up to date. We regularly post free and honest publicly available information and video’s. Let us help you be as prepared as possible for your next round of purchases, contract renewals or other (mid-term) negotiations with Microsoft.

Continue reading our series on top changes in FY22: Delays in Microsoft’s paperwork.