Changing economic conditions combined with currency fluctuations have prompted Microsoft to announce plans to realign its prices globally.
This price adjustment means that from 1 April 2023, GDP pricing on all Microsoft Cloud services will increase by 9%. These price changes follow hot on the heels of the increases that came into effect on 1 January 2023 for all Microsoft SQL Server on-premises licenses.
Going forward, Microsoft says it will assess pricing in local currencies on a twice-yearly basis. So in the future prices could go up or down, depending on fluctuations to the USD to GDP currency exchange rate.
Which products are affected?
The April 23 price increase will affect popular offerings such as Azure, Dynamics 365 and Microsoft 365. That includes customers who subscribe to Azure on a PAYGO subscription directly with Microsoft.
For customers with an annual commitment, these pricing changes will take effect at their next renewal date after 1 April 2023. Meanwhile, customers on a monthly commitment can expect to see the price increase in their first monthly renewal after that date.
Mitigating the impact
Increases in license costs are never welcome. However, Microsoft’s new price review regime introduces some degree of predictability when it comes to knowing when the next price change is on the horizon. Plus, it may well be that these prices go down if the UK pound performs more strongly against the US dollar.
In the meantime, however, the April price change may prompt some to take action. With that in mind, here are some top tips on ways organisations can look to mitigate the cost impact of these price updates to their business.
- Undertake a software audit – right sizing your licensing in line with actual business needs is the first step to optimising costs. Whether that’s eliminating licenses for tools that aren’t being utilised by all users. Or identifying and accounting for duplicates or redundant tools.
- Track your assets – the constant churn of leavers and joiners means that, without the right processes in place, you can end up missing a trick when it comes to ensuring licenses are redeployed. Old employees drop off their laptops to the IT department, while new employees head to procurement to task for new devices and the licenses that go with these. Squaring the circle here can help you cut software licensing costs.
- Restructure your licensing options – working with experts who understand the ins-and-outs of Microsoft’s licensing environment means you can evaluate the most cost-effective licensing options for your needs. That includes having a full and informed view of the licensing pricing lifecycle.
- Get creative – when it comes to servers, consider creative options like partial licensing for server cores and licensing bundles. Again, speaking to a trusted partner that can help you navigate Microsoft’s product licensing agreements can prove invaluable here.
Moving ahead with confidence
While the upcoming price increases may be concerning, it’s important to remember that Microsoft’s cloud services offer a high degree of scalability. Which means businesses can quickly and easily increase or decrease the resources and licenses they need.
With some clever strategic thinking, and some basic housekeeping, it’s possible to ensure that your organisation only pays for what it’s actually using in the most cost effective way possible. All the while making the most of the opportunities the cloud has to offer.
