Microsoft Pricing Changes

Microsoft has announced a series of pricing changes coming in October 1st 2018. These changes are designed to give consistency and transparency to customers, making it easy to compare prices and ensuring partners are delivering value-added services to customers. This is all part of Microsoft’s modern commerce transformation initiative.

So what changes are occurring?

Common ground

Historically, customers have found the pricing of products inconsistent and confusing. Addressing this, Microsoft are updating the pricing structure for small and midsize customers by having consistent start prices for all programs aligned to web direct for online services (OLS) regardless of purchasing method (through partners, self-service or Microsoft assisted).

Removal of some volume discounts

Currently, pricing and discounting policies are devised to sell software at scale. Volume discounts are being removed at level A and Open level C in Enterprise Agreement (EA), EA Subscription, MPSA, Select and Select Plus, in addition to all the Open programs (Open, Open Value, Open Value Subscription).

The result of this is customers are no longer incentivised to standardise unnecessarily on software. The focus now meets the on-demand needs of customers and leads to partners needing to provide value-added services.

Price adjustments

The product price sheet is changing to show the significant value added to products over time. Office 2019 commercial prices are set to increase by 10% over the current on-premises pricing. This includes Office client, Enterprise CAL, Core CAL and server products.

Not only this, user and device pricing is being updated with Windows 10 Enterprise E3 undergoing a name change:

Windows 10 Enterprise E3 per User → Windows 10 Enterprise E3

Windows 10 Enterprise E3 per Device → Windows 10 Enterprise

Windows 10 Enterprise E3 now refers only to per user and the per device instance is becoming Windows 10 Enterprise. Its price is being raised to match Windows 10 Enterprise E3. Finally, Windows 10 Enterprise E5 per device will be discontinued.

Government Alignment

Currently, government pricing has been aligned to the lowest commercial pricing in Web Direct and CSP but other programs have had price differentiation. The new pricing structure allows greater transparency and consistency across purchasing options. This is realised by aligning government pricing to the lowest commercial price in Open programs, MPSA, Select, Select Plus, EA and EA Subscription.

The benefit of this is it removes the inconsistencies and allows comparisons to be made which previously, is difficult due to the pricing discrepancies.

Overall, Microsoft’s view on the pricing update is designed to aid customers to make sound procurement decisions and to aid in the realisation of long-term cost savings of moving to the cloud. The buying and selling experience for all parties involved should be improved as a result.

To discuss the impacts of these changes and how they affect you, contact [email protected].

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