More Price Increases from Microsoft? You Bet.

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom and transportation.

Changes are afoot at Microsoft, and contrary to the current publicity surrounding the company, they have nothing to do with Surface and Windows 8. The real changes – the ones that stand to impact enterprise customers the most – are happening in Microsoft's licensing and pricing strategy.

A couple of weeks ago, we discussed how the company has changed its licensing terminology from "desktop-based" to "device-based." This is part of Microsoft's grand plan to capture more licenses for the growing number of devices in the enterprise. As a result, many enterprises are considering moving from a Device Client Access License (CAL) to a User CAL (which licenses clients by the number of users rather than devices).

That seemed like a good fix until earlier this month, when Microsoft announced a 15 percent price increase for User CALs.

In effect, Microsoft has created a lose/lose situation for many of its largest enterprise customers. Both Device CALs and User CALs are substantially more expensive as of December 1. And this comes on the heels of a long list of other price changes, including increases for SQL, Windows Server 2012 and annual support costs.

The final result? Enterprises should expect to pay significantly higher fees for Microsoft offerings in 2013 unless they do three things:

  1. Assess exactly how these changes will impact their current Microsoft environment.
  2. Factor in their long-term Microsoft needs and usage roadmap.
  3. Time CAL and EA negotiations accordingly. If you don't have an EA, sign up for a CAL (preferably a User CAL) prior to December 1, 2012. If you already have a User CAL, renew early to avoid the 15 percent fee over your next contract term.

If the last few months are any indication, Microsoft will be giving enterprise customers a wild ride in 2013. The way you budget and negotiate your purchases and renewals will be critical for staying within budget and eliminating cost risks.

- Jon Winsett, CEO, NPI

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