Industry Blog
May 31st – What’s the Other Big Deal? Microsoft
Set it and forget it, they said. Subscriptions will be easier to manage, you heard. Counting licenses will become a thing of the past, everyone agreed. But you can’t, they aren’t, and it isn’t.
Instead, the number, complexity, and cost of Microsoft subscriptions have gone up, while discounts and benefits have gone down. Even organizations with strong automation to manage subscriptions still face hurdles when it comes to contractor, consultant, and service accounts, to name a few. And using a reseller or SAM toolset… who has access? How do I skill up? How much does it cost? Am I going to get reseller lock-in? Will it be timely? When do I start?
Now is the time to analyze subscriptions for reductions with Remend!
June 30th is the end of Microsoft’s fiscal year. The consensus is that more than 70% of Microsoft’s customers with Enterprise Agreements (EA) signed them in June, eventually putting customer anniversary start dates as July 1. Since Microsoft EA contracts demand customers submit mid-contract subscription reductions at least 30 days before the agreement anniversary date, customers with a July 1 anniversary date must submit subscription reductions in May under contract terms. Otherwise, customers may face the possibility that Microsoft will decline adjustments and the new contract year will start with an unnecessarily high, and potentially costly, baseline.
Customers in a renewal year have until the contract ends to re-baseline, though often Microsoft sellers will push customers to provide numbers a month or two in advance to start structuring deals. Initiating the next contract with a rightsized baseline requires knowing what reductions and changes can and should be made in May. This is especially important as Microsoft expands the scope of subscriptions and the per-person cost increases with offerings including Copilot, security, telephony and more. Typically, the spend reclaimed from a rightsized baseline can be diverted to more impactful offerings – which may even influence discount rates and the overall deal.
It’s not too late!
If you have a tool, dust it off and see if you can find errant subscription assignments, over-provisioning, and dead accounts – especially related to the account types previously mentioned. If you’ve acquired software licensing services, have them kick things into high gear. And if you don’t have a tool or want to audit the relevance and accuracy of the tool or service, Remend can help with rapid turnaround and analyze your Microsoft 365 subscriptions in days, or less.
Understand your Microsoft subscription reduction opportunities in 5 easy steps:
- Based on your agreement lifecycle, plan for a project to start 60 days prior to your anniversary, whether it is July 1 or another date.
- Work with your team, your tool, your partner, and Remend to run reports and analyze usage and licensing assigned to people and accounts.
- Review the analysis with Remend’s expert staff to identify opportunities for reductions and changes at the account level.
- In a renewal year, include Remend in your contracting and purchase process. As an independent advisory firm, we are here to guide you in aligning your Microsoft purchases with your needs, not their end numbers or market share goals. We won’t let you be confounded or bullied into purchasing or upgrading to something you don’t need.
- Take a deep breath. It’s time to enjoy the cost savings or reinvest them in other parts of your business for future growth.
Simply said, Remend is here to help you analyze what you are using and paying for to determine if you have the right structures and the right deal. We will also help you discover what is missing or needed to make your business more efficient.
Is that everything?
Unfortunately, no. The Microsoft anniversary is also the time to “true-up” – to pay for on-premises licenses in use that haven’t been purchased. Don’t forget to analyze and optimize perpetual licensing, especially for Microsoft Windows and SQL Server, and provide your annual true-up report on time. Similar to subscription reductions, “on time” means at least 30 days prior to anniversary mid-contract, or in the last month of the contract in an anniversary year.
Caution!
If Microsoft feels the true-up was inaccurate, light, not enough revenue, or something else, contract language supports their ability to audit. And while Microsoft audits don’t typically inflict excessive fees and penalties, nobody likes surprises or spending time and money on things they don’t need.
Get moving!
You, yes, you need to get moving! For many organizations, the clock is ticking down on the ability to make Microsoft subscription reductions. You can’t count on Microsoft to help you identify optimization opportunities. You can count on them to try to sell you more, as close to list price as possible, of the products and technologies that matter to them – both the individual seller and the company. Don’t stress! Call Remend and work with an advisor who cares about you and your business outcomes.