8 Best Practices for Successful Software License Management
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Earlier this year, Microsoft announced several major changes on the horizon for Microsoft customers. Get your complete playbook for upcoming licensing and subscription pricing updates across O365, Windows 365 and more.
Office 365 and Microsoft 365 form a large part of Microsoft’s revenue, and it is continuing to grow. This means it is also likely to be a growing part of your software spend as new features, licenses, and add-ons are made available by Microsoft.
Although you may have been working with Microsoft 365 for several years at this point, there are still a variety of methods you can use to first reduce your Microsoft 365 spend and then to help keep it under control as your organisation changes and grows.
SaaS and cloud fuel software spend
As organisations continue to adopt SaaS and cloud, fuelled by the ongoing shift to hybrid and flexible working, there is an increased risk of software over-spend. However, that also means there is an increased opportunity for ITAM professionals to demonstrate their skills to the business.
In this short article, we’ll look at recent announcements from Microsoft that may impact your pricing and future licensing options, and provide negotiation strategies you can use to optimize your software spend.
Stay up to date on all the key Microsoft licensing changes. Get the Ultimate Guide to Microsoft 365.
Microsoft 365 Price Increases 2021/2022
The new prices will take effect from March 2022 and the new list prices will be:
Note: There were no price increases announced for Microsoft 365 E5 or the “F” SKUs.
ITAM: The business cost saving strategy
This change from Microsoft represents a fantastic opportunity to review your Microsoft spend and strategy. Take a look at what you’re buying and compare that to what you’re using. If the gap is too big, identify what changes can be made and when, depending on your contract and internal business drivers.Start to define your negotiation strategy – can you work with Microsoft to get a deeper discount to (partially) offset these price increases? Be wary however, of what you might have to commit to in order to get a larger discount percentage…it’s likely they will be pushing higher level licenses such as M365 E5. Make sure you only purchase what makes sense for your business and your budget.
Work with your procurement stakeholders to identify potential contract changes that can be implemented to help lessen the impact of the price increases. If you have a renewal due before March 2022, can you negotiate an agreement longer than the standard three years – thus protecting you from the price increase for even longer?
Alternatively, if your renewal date is post-March 2022 – evaluate if an early commit make sense. This involves bringing your renewal date forwards in order to lock-in the current lower Microsoft 365 pricing. While it may save you money in the long-term, it will have an immediate impact on budgets and cashflow so may not always be the right answer. However, it is a wonderful opportunity for ITAM to demonstrate to the business how business decisions and budgets can be impacted by ITAM considerations.
IT visibility across your Microsoft estate
In the vast majority of scenarios, accurate and comprehensive data is key. Knowing what you have, where it is, and how it’s being used, underpins informed decision making and a SAM tool – when properly used alongside the right people and processes - can help you make the best decisions as quickly as possible.Keeping your Microsoft 365 licensing estate optimized and cost-effective is something that all ITAM professionals need to do. Having a set of processes and checkpoints on a quarterly and annual basis will help ensure a smoother and more streamlined process as you approach each Microsoft agreement renewal and anniversary True-up .
Optimize your Microsoft spend
With significant amounts of change within customer organisations and within Microsoft’s licensing and product line-up, regular reviews will help ensure spend is as well optimized as possible:
- Identify where you may be buying too many licenses and also where the licenses you do need are “over-sized” for the users’ requirements
- Consider how the timing of your agreement renewals can have an impact on your spending, particularly with regard to price increases from Microsoft
- Profile the users across your organisation to determine if different licenses – such as the F SKUs – can be used to reduce spend for certain job roles
Stay up to date on all the key Microsoft licensing changes. Get the Ultimate Guide to Microsoft 365.