Spend Matters welcomes this guest article by Clay Conklin, director of client services – Microsoft at NPI, a spend management consultancy, focused on eliminating overspending on IT, telecom and shipping.
As Microsoft’s fiscal year comes to a close, the vendor is already setting its sights on how to increase revenue for on-premise commercial licensing. One example is a User CAL price increase of approximately 13% set for Aug. 1. This hike will affect the majority of on-premise User CAL licenses including:
- Core CAL Suite
- Enterprise CAL Suite
- Exchange Server Standard & Enterprise CALs
- Lync Server Standard, Enterprise and Plus CALs
- Project Server CAL
- SharePoint Standard & Enterprise CAL
- System Center Configuration Manager
- System Center EndPoint Protection
- System Center Client Management Suite
- Visual Studio Team Foundation Server CAL
- Windows Server CAL
- Windows RDS & RMS CAL
- Windows MultiPoint CAL
Most User CAL customers will be affected by this price increase, and that extra 13% or so could have a sizable impact on the business’ Microsoft spend. If you’re a Microsoft enterprise customer contracted under a User CAL, there are steps you can take to lessen the impact of these price increases – but time is of the essence.
Review your Microsoft product use roadmap. If you’re considering upgrading older versions of Microsoft’s software that are licensed through the Server/CAL pricing model, then now is the time to lock in pre-increase pricing.
Explore post-deadline concessions. Microsoft sourcing and negotiation events are rarely a quick exercise. Even if you’re currently in discussions with Microsoft and/or your reseller, there’s a good chance that it will be difficult to meet the Aug. 1 deadline. If you find yourself in this position, you can inquire to see if any pricing concessions are available to allow you to leverage the pre-August pricing.
Don’t assume you’re off the hook forever if you have a pre-increase price locked in. Complacency is enemy No. 1 in vendor spend management. Customers that have locked in pre-August User CAL pricing will still most likely see a costly price hike upon renewal. By that time, most will have forgotten about the pricing change and will have little leverage to mitigate its impact. Now is the time to engage Microsoft and/or your reseller to find ways to negate or minimize the effect.