By Paul DeGroot, Software Licensing Advisors
Microsoft is increasing Microsoft Enterprise Agreement prices more than it has at any time in its history, partly because key businesses like Windows 8 and Office 2013 are falling or stalled.
Windows Server Datacenter is increasing 28%. SQL Server CALs up 25%. SharePoint up 38%.
But you ain’t seen nothin’ yet. Double-digit price increases are child’s play compared with what lies ahead for customer’s renewing their volume licensing agreements. How about 100% price increases? 450%? 1,500%? Even 3,800%?
We’re not making those up. Those are the kinds of price increases that many our customers are seeing when they get a renewal proposal from Microsoft.
The reason these price increases aren’t well known is that they’re clouded by changes in licensing.
Take a simple product like SQL Server Standard. When it’s sold for use with Client Access Licenses (CALs), which some customers prefer, it costs less than $900. But Microsoft has a new model, licensing SQL Standard by processor cores.
Cores are a lot more expensive, but Microsoft will generously let you convert your $900 Server/CAL license into cores. On a processor with two quad-core processors, you’ll get eight core licenses, which are each worth about $1,500, or about $12,000.
Now that seems generous, doesn’t it? Convert a $900 license into a $12,000 worth of licenses.
Sure it is, but Microsoft has a trick up its sleeve.
You see, when you renew Software Assurance on that license in a new agreement, you’ll pay the usual 25% of the license price each year. On a $900 license that would be a bit more than $200 a year. On a $12,000 license it’s more like—gulp—$3,000. Thanks to Microsoft’s generous gift, your Microsoft Enterprise Agreement renewal costs just went up about 1,500%.
What are you getting for that massive price increase? It’s entirely possible that you’ll just leave the server where it is, happily doing its job. The only thing that has changed is how you pay for that—$3,000 a year. In one year you will pay more than three times what you paid for the entire server license originally. And the next year? You’ll pay it again.
It gets worse. The old license didn’t care how many cores the server had, but the new one does. How about a two-processor server with 8 cores per processor? Software Assurance on that baby will be upwards of $7,000 each year, an increase of about 3,000%.
For all SQL Server Software Assurance renewals (except a SQL Server Standard license which you elect to not covert to cores), anything running on more than four cores per processor will see a price increase of at least 50%.
How do you protect yourself from such massive price increases?
Get the core conversion spreadsheet (here) and enter your own numbers. Then, call Software Licensing Advisors at 866-825-3787. Our licensing and negotiations experts help customers optimize their license costs, maximize the value they get out of an EA renewal, and play the core game to their advantage. One of our customers got $500,000 in core licenses for $250,000 and will still pay less for SA on SQL Server in renewal than they did in their previous agreement.
We’re “The Customer’s Advocate.” We’d love an opportunity to help you out, too.