Wednesday, October 15, 2014

Tips from an industry insider: Paying Microsoft more than you should? How to negotiate the best price.

Are you paying Microsoft more than you should be?Microsoft makes it difficult not to.  
You pay a premium at the point of purchase
Microsoft's pricing structures are intentionally complex and opaque. Some list prices (Microsoft calls them "ERP" – Estimated Retail Price) are published. It's possible to get competitive reseller quotes for volume licensing programs such as Open and Select Plus, but Microsoft does not publish pricing for the direct-with-Microsoft agreements such as Enterprise Agreements.  Optelcon create an inventory of your licenses and help determine the best structure which gets you the most for your investment. 
So, how do you know if you paying a fair market price?Even though it insists it doesn't, Microsoft does negotiate its prices. Sometimes to levels well below what a typical customer sees.  The only way you will know what others are paying, is to work with a company like Optelcon. Our current market pricing database of deals negotiated, RFP's and analysis will provide you with evidence-backed data to make sure you are not paying more than your competitors?
When was the last time you renegotiated your Microsoft licensing agreements?
In any dynamic organization, things change. License consumption, new products, new releases, cloud solutions, IT infrastructure etc...
Microsoft continues to restructure and update their  product lines. Microsoft is constantly adding and removing product from their licensing bundles, revising usage terms.
The fact is, few companies are perfectly aligned with Microsoft's release cycles; it's well known that most tend to lag a cycle or two behind.
Are you running the latest releases and "The Full Stack".
Ironically, companies who are less reliant on Microsoft products the customers tend to pay less than those who are most heavily invested in the Microsoft technology "stack".  The more committed a company is to the Microsoft product set, the more difficult it is to switch vendors. You better believe Microsoft uses to their advantage.  If Microsoft believes your company is a "Captive Audience", what incentive does Microsoft have to provide the most aggressive discounts?
How does your company navigate through these challenges? 
Saving money with Microsoft is not easy.  Without a deep understanding of their selling rules and are armed with real market data, you will be hard pressed to get the best terms and pricing.