Beware of the Invisible Price Hike
January is right around the corner. In SPLA that means one thing. Price increases. Microsoft is aggressively pushing hosters to Azure. As much as they’d like to make your IT decisions for you, they can’t. So, they’re going to apply pressure where they can: your monthly SPLA costs. The idea is to make it financially worthwhile to run on Microsoft Azure rather than other cloud providers, including your own data centers.
This is how it’s playing out:
You purchase your SPLA licenses from your Reseller.
US Resellers historically have passed through the Microsoft price list and received a percentage (rebate) on the sale. This rebate used to be good business.
In the past year, Microsoft has eliminated rebates for products reported by you for most application products like Exchange, Office, SharePoint, etc. Microsoft has also eliminated rebates all together for certain Hosters who report to their Reseller.
Resellers are now making less money for performing the same business.
So, you have Microsoft getting aggressive with Azure, and you have SPLA Resellers making less profit for reselling you SPLA licenses.
This is a perfect storm for a SPLA price increase. You will get a price increase from Microsoft. SPLA Resellers have endured rebate decreases for the last few years, so it’s unlikely they can sustain just passing along the Microsoft list price to you. Resellers are not able to continue functioning at such low margins, so what you’ll be paying next year is a higher list price plus an additional margin for items that are otherwise not profitable for the Reseller.
That’s two price increases in one year!
You have no plans to abandon your data center and move to Azure, so, what can you do?
First, it’s essential to do a full accounting of all Microsoft software deployed in your environment and determine the actual usage levels. Then you need to figure out how to reduce license costs, or pass those on to your customers.
Now calling up a customer and telling them prices are going up is the worst idea. In many cases, you have multi-year contracts where price increases are simply not an option. The best path for most SPLA Hosters is to optimize their current environments and report as few licenses as necessary to remain in compliance while paying as little to your Reseller as possible.
That’s where Altaris comes in. We provide services that scan and discover all Microsoft software and usage levels across your entire network. We analyze and determine all optimization strategies as part of the package. The cherry on top is that it all comes with full-service audit support. At the end of each month, we provide you with your fully optimized, completely compliance usage report.
You’re already spending time each month auditing and reporting the software. With Altaris, you’ll not only eliminate that wasted time, but you’ll also reduce your overall licensing fees to your Reseller through our proven optimization processes.
Make sure you’re prepared before January 1st when the price increases land. Contact us today to find out how to continue a profitable hosting business without taking another hit from Microsoft.
Schedule your free 30-minute consultation with The SPLA Licensing Experts today!
As Always,