After months of speculation, Microsoft have revealed that they will be introducing a 9% price increase for UK customers across their portfolio of Cloud services, effective from April 1st 2023.
These price increases will affect you if your business is using any of Microsoft’s cloud services, such as Azure, Dynamic 365, and Microsoft 365 – which means the vast majority of businesses who have (rightly) rushed to adopt Microsoft’s cloud offerings in place of legacy server based options.
The increases are particularly unwelcome as they follow 2022’s price increases which, whilst less broad, were as much as 20% for some of the Microsoft 365 packages.
When and Why?
The new pricing will take effect from April 1st 2023.
Microsoft are implementing these price changes to align Microsoft pricing globally to their home-base pricing in US dollars.
The announcement also includes a further change in that pricing will now be reviewed twice a year going forwards, to ensure that it remains aligned with the USD through more turbulent economic times.
During this unsure macro-economic climate we find ourselves in, budget planning could become increasingly challenging, if Microsoft re-visits their pricing every 6 months.
The only advantage of Microsoft basing pricing according to forex, is that as the value of the pound fluctuates, changes can be predicted and there comes a possibility for price decreases.
So What Can You Do ?
Understandably, these price changes are a point of concern for many businesses which utilise Microsoft’s cloud services.
In the light of the 9% price increase announcement, we have worked to identify four key ways that you can:
- Mitigate: reduce the impact or flat out avoid the price increase.
- Manage: optimise and rationalise your Microsoft Cloud spend.
- Get the most value you can from your investment.
Ensure Best Pricing
In recent years, Microsoft has pushed for long-term commitment offers, as it allows for considerably easier capacity planning.
As such, Microsoft are highly accommodating to those wishing to commit to long term commitments, and offer huge discounts.
Utilising payment models such as Azure Reserved Instances and Sentinel Commitment Tiers, you can gain discounts on Microsoft pricing upwards of 72%. In some circumstances further discounts can be granted for organisations with substantial amounts of employees using Microsoft products.
Avoid the Increase
Through advantaging Microsoft’s different licensing agreements, you can lock into the current prices for terms of one to three years, with the possibility to extend your agreements a further 2 years.
Utilising agreements such as Microsoft Enterprise Agreement (EA) or Cloud Solution Provider (CSP), you can avoid the increase entirely (for a while at least). You must work fast to secure this opportunity by committing to these agreements before the implementation of the price change on April 1st.
Optimise & Manage Spend
A surprising amount of businesses are unaware of exactly how their cloud investment is being spent. This leads to inefficient cloud usage and unnecessary expenditure. It is important to understand how costs breakdown in budget consuming software such as Microsoft Sentinel.
Microsoft’s Cost Management Centre allows you to review your organisation’s cloud usage and consumption. From here you can reduce costs and improve efficiency, allowing you to do more with less.
Maximise the Value of Your Investment
With the upcoming Microsoft Cloud price increases it is essential to review your Microsoft cloud infrastructure to ensure that your business is maximising the value of your investment.
Microsoft’s cloud software offers a wide range of beneficial services. These can bring down costs in other areas of your business, if implemented effectively.
How We Can Help
As a Microsoft Gold Partner, we at Vital are ideally placed to help you access and implement these four key strategies. With our team of experienced and certified technicians we can help you:
- Understand your current Microsoft expenditure.
- Develop spending strategies.
- Optimise your consumption.
- Secure the best pricing.
- Maximise your investment’s value.
If you would like a no obligation review of your Microsoft cloud infrastructure get in touch here.
