How to prepare for the Microsoft price changes in 2024
Microsoft has put across expected price changes for 2024 targeted at the first and second quarter of the year. This will not be anything new as Microsoft announced in 2022 that these price changes would be done to align Microsoft cloud pricing globally to level up with the U.S. dollar.
The changes will begin in February and continue till May 2024. Microsoft believing in a reason to establish a transparent cadence considering currency fluctuations locally, is allowing for the Japanese Yen adjustment to delay till April.
This is because Microsoft wants to allow a twelve-month period between the last adjustment and this newly proposed one. For the Chinese Yuan, the adjustment will take effect in May 2024.
What are the effects of Microsoft price adjustments for you?
Microsoft price increases can be dire on the cost of your operations as an organization. There will be the sudden need to allocate more of your budget if this is not planned at the beginning of the year to meet up with purchasing licenses to use products and services.
Again, your organization will suddenly be faced with making tough decisions if there is no strategy to control your costs. This is because you may not have in place plans on how to prepare and stay operational with price increases. You should have months ahead of the price adjustment, forecasts and include financial controls to accommodate the higher costs this will bring to operations.
With Microsoft driving the cloud adoption conversion and making available incentives to get organizations there, your IT strategy can consider Azure, other cloud products and services available, and how to take advantage of it. Get an independent cloud expert to guide you on how to optimize cloud usage to save on spending. This will in the long run help mitigate the impact of price adjustment as a cloud user.
Having a CSP, NCE or Enterprise Agreement renewal or agreement negotiation looming this 2024 running into 2025? As part of the little details to take note of, to optimize your agreement pricing should be one of the priorities. Having the nine-month window for preparation in mind, you should be looking at how to negotiate to mitigate the effect of the price increases.
Frequently examine what you want as an organization going into the future and settle just for that. Leave no room for on-the-spot decision-making as Microsoft negotiators may push you to sign up to products and services you don’t need. A discount should not be bait to purchase or sign up for services.
The 5 key options to mitigate Microsoft’s price increase 2024
This will be dependent on what products and services you need as well as your location, organization’s size and negotiation leverage.
1. Early negotiations can save you 10 – 35%
With a well agreed strategy involving all key stakeholders of your organization, approach Microsoft and your reseller to discuss specific products and services you want a discount on and the agreement terms. Discuss price increases and find ways to explore options for mitigating the impact. Timing and preparation are everything. Be prepared when you approach them.
2. Assess your license usage and get the facts right
Paying for what you do not need in these times of economic uproar is a cost you want to avoid. Make sure you are paying for the services you are using by reviewing your current usage and licensing agreements. Check over-licensing or the usage of features that are not essential. Put in place tools that can help track and suggest every little activity that can be done away with to optimize your entire IT environment.
3. Challenge your LSP or your CSP with a benchmark
For how long have you been with your current Microsoft reseller? Are they giving you the best price? Is the service good? Are they really helping you to save and optimize your environment? Or are they just like many resellers; react when you ask them to react?
A lot of money can be saved by setting a benchmark. The grass is not always greener on the other side. But in licensing the grass can definitely be greener. We have many players with different visions and approaches. A benchmark can help you as a business in these difficult times.
4. Consider Hybrid Solutions
Looking at business operations in these difficult times, depending on your location, this option may be considered. Some geographical locations have no price adjustment upwards for on-premises; hence you can take this into consideration to address your needs as an organization. You may do more of on-premises solutions together with cloud solutions to help mitigate the effect of the price adjustment. When you consider a hybrid solution consider also pre-owned software. This is very interesting for European companies. With some pre-owned Microsoft products, you can save up to 70%.
5. Engage an independent Microsoft expert
There are other options that our independent experts can guide you with. We will do a total assessment of your IT space and support you to optimize your workload on Microsoft Azure to ensure that resources are used efficiently if you are already in the cloud. This will involve right-sizing virtual machines, implementing auto-scaling, or utilizing reserved instances for cost- saving.
We will make available our years of negotiation experience to assist you on scenario usage to get insights on what and how to negotiate to mitigate licensing costs. Your organization’s unique circumstance will suggest what path to embark on to get you the right solution, but the first step is to reach out to us. Let’s start preparations early to understand what optimization options are available and how to explore alternative options.
Contact us and let’s help you with a long-term plan on strategies for managing your Microsoft costs. This will involve regular reviews of your licensing agreements, staying informed about changes in Microsoft’s pricing and product offerings, and adjusting your strategy accordingly.
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