If you’re reading this article, it’s probably because you have a Microsoft Enterprise Agreement that’s about due to renew. Most of Microsoft EA’s expire / renew in June because that’s Microsoft’s fiscal year-end. Of course, here we are in late May and so the fun has barely started! A few questions to ask yourself:
- Did you get your renewal quotes back yet?
- How are you liking the massive price increases compared to your expiring deal?
- Happy with those?
- Has Microsoft been exceptionally accommodating and responsive throughout the process?
If you answered yes to all the above - good. No need to keep reading. For the 99% of the rest of you, consider your situation.
Merger, Acquisitions, Divestitures:
Have you perhaps acquired any other companies in the past year? Did you get that integration, licensing and contract consolidation all sorted? Microsoft makes it really easy and clean, am I right? (Ha!) No, they typically don’t, and for them its an opportunity to create more financial liability for you (to them). Sales organizations are trained to look for ‘friction’ to create long term opportunity and one of the best friction points are around M&A activity. They know the deal(s) have to get done and what’s on the line for stakeholders which is often all the leverage they need.
Your Negotiation Strategy:
Are you maybe thinking, “Yeah they can ask for a price increase but I won’t pay it, I’ll negotiate them down.” If that’s you, your surprise hasn’t happened yet. I won’t ruin the suspense for you. Suffice it to say they spend millions training their sales teams and contract people to structure deals and negotiations in such a way to make you think your winning, until you find out half way through your next EA that your spend is rising and or the add-ons you now need are excruciatingly expensive. Think of negotiating with Microsoft like gambling in Vegas – they may throw you a few crumbs here and there to keep you engaged, but the house always wins. Think I’m wrong? Check out Microsoft’s income statement, where they spent $20B USD on Sales and Marketing expenses :
Source: Microsoft 2021 Annual Report
You’re thinking that we’re having a great year financially, thick budget increases abound, you’re now planning to upgrade all of your users to E5 with security and compliance and get everybody a Dynamics license as well, because Microsoft has pitched you a once in a lifetime, top secret, super sweet deal that nobody else is getting offered… is that you? And do you believe it when your Microsoft rep tells you that? I might have a surprise for you there.
Did you have a “trusted partner” such as your Microsoft reseller “help you out” with your true up for your on-premise servers, only to discover (surprise!) that you had been counting them wrong and now you owe a lot more money than you had budgeted?
The answer to the question at the top of this article is:
It’s not a surprise to us - it’s only a surprise to you.
At NET(net) we deal with dozens of Microsoft renewals every quarter. So, the “surprise” to you, is just another day at the office to us. We’ve seen it before, ten times this month. We know what’s wrong with that amazing once in a lifetime offer and how to get to a place of understanding for what you really need to buy and how to get the right price for it.
When you see as many deals as we do, work with hundreds of clients and see the same things happening consistently worldwide… then it’s not a surprise. It’s business as usual. We have developed the counterstrategies that work for each of these problems as well as the dozens of other types of surprises that Microsoft might spring on you. So, if you’re tired of these “surprise!” games, get in touch with me, and we’ll take the mystery out of your deal.
Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. With over 2,500 clients around the world in nearly all industries and geographies, and with the experience of over 25,000 field engagements with over 250 technology suppliers in XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, Telecommunications, and other areas of IT spend, NET(net) has the expertise you need, the experience you want, and delivers the performance you demand, resulting in incremental client captured value in excess of $250 billion since 2002. Contact us today at firstname.lastname@example.org, visit us online at www.netnetweb.com, or call us at +1-866-2-NET-net to see if we can help you capture more value in your IT investments, agreements, and relationships.
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