Persistence and Clear Roadmaps Deliver Big Discounts

Small firms don't qualify for the big discounts on Enterprise Agreements that larger customers get, but that didn't stop this technical services company from gettinga great discount. The secrets: carefully define your requirements, stick to the roadmap, and you can write the deal.

Negotiations Assistance Needed

Microsoft Negotiations and Licensing WorkshopRecent reductions in staff led an east coast technical services firm to re-examine all financial commitments. When its Microsoft Enterprise Agreement came up for renewal, the company's vendor management staff were not convinced that they had the experience or knowledge required to get the best possible deal. They sought assistance from Software Licensing Advisors (SLA).

Reviewing the Proposals

SLA's review of proposals from Microsoft and the reseller found that the proposals would result in costly overlicensing. The customer recognized some overage, such as proposals that covered more employees than the customer actually had. But SLA spotted other overlicensing, particularly for System Center and Windows Server, where changes in Microsoft licensing resulted in higher quantities of licenses than the customer would realistically use.

In addition, Microsoft was proposing substantial investments in cloud services and a Server and Cloud Enrollment that would lock in Software Assurance on a high numbers of server and could force the customer to repurchase some licenses it already owned.

Defining the Roadmap

After reviewing the customer's current agreements and proposal, SLA developed several options for the customer to review, including an ultra-lean renewal. While reducing spending by about 65%, this proposal's practical impact on operations was minor. In addition, SLA identified company staff who worked as on-site contractors at customer sites and who did not need to be included in the customer's user and desktop count, since they were licensed through the firm that contracted them. This resulted in additional reductions in license count.

The customer added a few licenses to the ultra-lean renewal that boosted its price about 10%, still well below proposed renewals from Microsoft.

The Big Squeeze

SLA helped the customer determine a “ceiling price”--the most that the customer would need to pay, through an Enterprise Agreement or an alternative, such as a Select Agreement, in order to purchase all the software they needed for the next three years. This did not dissuade Microsoft from continuing to propose Office 365 and renewal of Software Assurance on Office, neither of which was on the customer's roadmap.

However, since the customer had set a ceiling price, Microsoft had to reduce prices on other products in order to get these additional products into the renwal. Although the customer, with fewer than 2,400 employees was eligible for only an A discount, Microsoft was proposing C and D (the maximum) discounts so that Office would be included. Even then it was over the ceiling price.

As the clocked ticked down to the final days before the renewal deadline, the customer's final counter-proposal made a slight concession to Microsoft—renewing Software Assurance on Office at a price that slightly exceeded the ceiling, but keeping all other discounts, including a C discount on Office itself.

When Microsoft agreed to that proposal, the customer forwarded the email to SLA with a single word: “YES!!”

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