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05.09.2018

Office 2019 commercial pricing is going up by 10%

Microsoft

WHAT, ME WORRY?

With Microsoft running in nearly all enterprises, headlines of a 10% price increase and removal of volume discounts can cause significant worry. This blog will help sift through the noise and aims to clarify who is affected, what impacts there could be and considers possible ways to mitigate the impact. There are essentially three headlines in this announcement:

  1. Office 2019 commercial pricing is going up by 10%
  2. Pricing for a few specific Enterprise Agreements is changing
  3. Windows 10 Operating System offerings are changing.

OFFICE 2019

WHAT IS CHANGING?

Starting with Office 2019, we see a continued nudge by Microsoft to move customers to the cloud. Microsoft states, “these changes will highlight the benefits of our pricing for a cloud-first world”, which is another way of saying, ‘we’re not raising prices on Office 365, just Office on-premise’. This price increase is across the board, so it affects all components of Office 2019, including Visio and Project, Enterprise CAL, Core CAL and server products such as Exchange Server, Skype for Business Server, SharePoint Server and Project Server.

WHAT TO WATCH OUT FOR?

Microsoft has a vested interest in moving customers to Office 365 as more customers on Office 365 increase their market share and recurring revenue. There are benefits associated with a move to Microsoft’s cloud-based products, but if your organization isn’t set up to take advantage of them, you could find yourself missing out on opportunities to improve infrastructure efficiency as well as optimize and consolidate licensing. While productivity server product prices will increase by 10%, the RDS per Device CAL price will increase 30% to match the per user price.

RECOMMENDATIONS:
  • Take a good look at your current licensing and get an understanding of who is using what in your environment. You will need ample amount of time to review, digest and take action on the data.
  • Building an accurate view of your estate will help you determine what licensing you need to keep on-premise, who can be moved to the cloud and what services or licenses you can stop purchasing. Leverage your IT/ Software Asset Management practice to get a snapshot of your environment, then plan accordingly for the migration.
  • Using a Software Asset Management solution like Snow can help tremendously. If your current plan is to try to sort through a CMDB or spreadsheet, you’ll struggle to generate the data you need to make an informed business decision.