How your organization can deal with Microsoft support service cost increase in 2024

For an enterprise that is in the business of using Microsoft products and services, price increases will not be a new thing. The new consistent thing is how to keep up with meeting the financial obligation that comes with increases in cost. How it usually interrupts daily operations especially when financial preparations are not adequately in place.  

One thing you can be sure of is that Microsoft prices will continue to go up and in the second quarter of 2024, Microsoft support service cost has increased. Surprised? Imagine what this increase will mean when your financial projections as an organization failed to consider your Microsoft support service cost but rather focused more on other negotiable variables. It can be a challenging situation.  

It is for some of these reasons why we advise that as an organization, try to solicit the advice of an independent expert who can help bring to your attention areas you are likely to ignore during your financial or IT budget preparations. You need an independent and unbiased view to support your decisions. In the case of experts from Q-Advise, there is even a no-obligation consultation option you can explore.  

Microsoft announced increase beginning April 1  

Microsoft announced another price increase for its software and services, effective April 1st, to include support service. This adjustment in price is seen to significantly impact the Asian markets, with Japanese customers experiencing a 20% hike for both cloud and on-premises products.  

Other countries will face increases ranging from 7% to 12%, while Brazil is the only country to receive a discount in price pegged at -7%. This development follows Microsoft’s decision to conduct semi-annual local currency pricing assessments to align with USD fluctuations.   

How Premier/Unified support service has increased.  

Your Microsoft Premier/Unified support service costs are directly tied to your Microsoft Cloud expenditure. As your Cloud service usage increases, so do you see a rise in support service costs if you observe keenly. A usual Unified Support Performance Plan at a certain price will see portions of your charges for Servers and Cloud usage even up percentage wise.   

Data we have come across as a result of working with different organizations and in the Microsoft, ecosystem suggests a global rise in cloud consumption, which is likely. Afterall, Microsoft is pushing the agenda of more cloud usage. Consequently, this sets a precedent for the continued increase in prices, as has been the trend in recent years.  

Support services costs are escalating annually, and this trend shows no signs of abating. Microsoft has introduced new products like Copilot and is supporting its usage with support tickets which will lead to increased costs from greater cloud and on-premises usage in order to keep enjoying its full benefits. Cloud usage is at the heart of Microsoft’s operations hence the close monitoring of cloud consumption metrics. For Microsoft, while cloud prices undergo universal adjustments usually across board, on-premises costs are more on a case-by-case occurrence.  

As mentioned earlier, price adjustments will be made twice a year, but the effects of these changes are not implemented simultaneously or immediately. However, some nations, such as Japan and China, will experience these changes at a later date. Pricing updates are typically confirmed by February 1st for most countries anticipating a change.  

Q2 price increases with Japan affected most.  

The diagram below shows various currencies and their cloud and on-premises adjustments. Most adjustment was confirmed February and although Japan was later in April, it was the worst hit. A few reasons can be cited for it.  

For Japan due to currency fluctuations and how significant its impact is, Microsoft Japan has raised its product prices to align with the US dollar pricing. This adjustment per the diagram affects both on-premises software and online services, each seeing a 20% increase.  

There is also the bit of standardizing prices worldwide to align with US dollar rates to ensure consistent and predictable pricing across various regions and make Microsoft products competitive.  

What decisions as an organization can help boost your savings as support service increases?  

Microsoft’s support service pricing changes will always affect the end-user leading to IT budget constraints. However, deciding on how to purchase licenses in order to use Microsoft’s products and services makes all the difference. Your options leading to savings can be…  

1. Choosing to deal directly with Microsoft as an oversea organization hence facing price hikes at Microsoft’s discretion.  

OR  

2. Purchasing through a Cloud Solution Provider (CSP), because CSP partners are billed in US Dollars for their customers’ Azure consumption and support services, with costs converted to local currencies using a monthly variable exchange rate.  

However, note that subscriptions through a Microsoft CSP under the New Commerce Experience (NCE) come with price-protection. But this protection has an expiration period and once it expires, subscriptions become vulnerable to market fluctuations.   

What you can do to expand your savings options  

What happens to your quest to exploit savings options when the protection period lapses for you as an organization who purchased through a CSP? You may receive ideas from your provider on what next steps to take or be left alone to navigate Microsoft’s pricing challenges.  

You can also engage the services of an independent Microsoft cloud and licensing expert to guide you with brainstorming to consider the best decisions. The Microsoft ecosystem is vast and there is a lot you need to consider when deciding on what to do. An “outsider” perspective which comes with years of experience, scenarios and deep understanding can give you sides you least consider.  

Talk to our team today, let’s support your licensing, savings and purchasing decisions. Can you identify the challenges ahead for your businesses as prices change consistently?  

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