Subsidiary differences explained

Microsoft subsidiary differences across regions

Rules and negotiation tactics differ across the regional Microsoft subsidiaries. We have a lot of experience working in the Western European region, as our background is in the Netherlands. However, we are also active in many other parts of the world. In this article we want to share some of our insights and best practices.

Local negotiation culture

To achieve good results –such as higher discounts – for our customers we have to adapt to the local negotiation culture. Different continents, countries, regions and even organizations have differing styles and etiquettes when it comes to negotiating.

Taking Europe as an example, we see various styles between countries. In the Netherlands, Portugal and Spain we have experienced an active and passionate negotiation culture, whereas in Scandinavia we saw that people tend to negotiate/push back less and are quicker to accept Microsoft’s initial proposals. The general trend we see seems to be the harder you shout, the higher your discount.

Leveraging foreign affiliates

Working in an international setting you have to be mindful of the different styles and negotiation tables you will encounter. One of our approaches when working for an international/multinational organization is to investigate the options of procuring in a different region to where they are based, to see if we can leverage their foreign affiliates.

This used to be common practice, but seems to be a thing of the past. At the moment, we are experiencing that this tactic is challenging, because Microsoft has prohibited internal negotiations options. This means sales teams in different subsidiaries cannot poach each other’s customers. This does not mean that it does not happen anymore, you just have to get more creative!

Support from independent partners

One way to navigate this complex playing field is with the help of independent partners, who are skilled in negotiating globally. Especially considering the constant changes to the rates and licensing rules.

Keep in mind that not every Microsoft country is the same and you need someone who is willing to take a risk. Be aware of the choices you make. For instance, if you sign up to an Enterprise Agreement in another currency, the exchange rate can affect you as you sign up for a three-year period. A lot can change in terms of exchange rates in three years.

How much risk are you willing to take?

In negotiations you also have to ask yourself how much risk you are willing to take. One of our clients played hard ball by letting their contract expire and by not letting themselves get rushed into signing a new agreement. They then enlisted our help to negotiate and close a great deal. If you are willing to take a risk, it can really pay off. However, we have also come across cases in which Microsoft did not take the bait nor seem to care.

As stated before, Microsoft has limited the possibilities of companies being able to sign contracts with other subsidiaries. Internally, this is a big no-no for Microsoft. This comes down to subsidiaries not poaching revenue from each other. However, Microsoft’s internal processes are not your concern! If you have a presence in a different country and you might be able to take advantage of working with a different subsidiary, explore your options.

Continue reading our series on top changes in FY22: The changing role of the LSP.

More information

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