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Buying Microsoft…be a frayed (afraid?)

It was 1984, and I was ready to buy my first "real" car. After months of searching, I settled on a used, beautiful, baby blue 1979 Volvo 242 DL from a very reputable Volvo dealer. I loved that car. Two weeks after buying it, I decided to take it to New York City for a long weekend. I got about 150 miles into the trip, and my Volvo died. Dead battery. New battery installed. Another 100 miles… dead again. Alternator? We charged the battery, and I was able to get it to a dealer in East Stroudsburg. Long story short, they found a hidden frayed battery cable, and $13.98 later, it ran like a top for the next 6 years.

How many frayed battery cables are short-circuiting your Microsoft purchases and EA renewals? Are you asking for discounts on your true-up table when renewing? If not, you are not alone. Most customers are unaware that nearly all (99%) of the products listed on your true-up table are discountable. What does this mean? It means that while you are negotiating a discount on the EA products with continuing Software Assurance, you will be paying list price for all new software listed on the true-up table. List price for the entire license, list price for all remaining Software Assurance. But don't expect Microsoft to volunteer that information, and why would they? Microsoft stock isn't above $300 a share by offering saving methods to their customers.

How about midterm purchases of new or existing subscription products? Again, many customers are paying list price for these products. Why? A few reasons. They don't ask for a discount. They purchase in haste. Ask, and ye shall receive… maybe. Don't ask, and you already know the answer.

I am also intrigued by customers who purchase many licenses to have on the shelf to deploy when needed. Cloud product deployments should have evolved (along with HR practices) to the point where licenses are purchased and deployed when needed, not pulled off the "shelf" when a new user is onboarded. The cost of 500 licenses of M365 E3 sitting on the shelf for an average of 4 months at a monthly cost of $34? $68,000. Including Project, Visio, and other subscription licenses, the cost could easily exceed $100,000.

How about Azure? Are you comparing cloud services offered by Google Cloud Platform (GCP) and Amazon Web Services (AWS)? It will be very interesting to see the Microsoft earnings announcement later this month and how Azure is trending. The Q4 numbers were not great, so now may be the time to ask for larger Azure discounts as Microsoft does not want to lose this battle. Keep in mind that Microsoft does not report specific Azure numbers. Instead, revenues from Azure are integrated into its intelligent cloud segment, which consists of public, private, and hybrid server products and cloud services. Again, you need to ask, but be sure to know your cloud numbers and give Microsoft a reason to offer a discount. Including your cloud projections, cloud services growth is important during these negotiations.

These are a very small subset of tactics that can save you money on your Microsoft (and other publishers). If you want the answers to the test, call Green Cabbage for a no-cost consultation.

Written by: Dan Pavlick VP of Cloud Services, at Green Cabbage

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