Licensing and Pricing Models in a Microsoft contract; pay attention to these areas

When entering a contract with Microsoft, it is important to carefully analyze the Licensing and Pricing Models being offered. This has become necessary to ensure that licensing models align with your organization’s needs and the pricing models are what you can afford.    

You will also have to consider your organization’s roadmap to make sure the contract terms fit into it and you are also able to abide by all the terms. Let’s share with you some key areas to focus on when you have a Microsoft contract to review.   

Reviewing Microsoft licensing agreements   

It is crucial to review the licensing agreements offered by Microsoft and to understand the different types of licenses available for your organization’s needs and budget.   

Read the agreement thoroughly by taking the time to carefully read through the licensing agreement, paying attention to all sections, terms, and conditions. Microsoft’s agreements can be lengthy and complex, so it’s important to read them in their entirety. Avoid picking and choosing what is of interest to you.   

Also identify and understand the key terms and conditions outlined in the agreement. Pay attention to licensing rights, usage limitations, software maintenance and support, data privacy and security.  

Microsoft occasionally updates its licensing agreements and you should endeavor to stay updated with them. It’s important to stay informed about any changes that may occur.  

Renewal Terms and what to pay attention to 

Pay close attention to the renewal terms in Microsoft’s licensing agreements. Remember renewal dates and know if you are to expect price increases and how those can impact your budget.   

Also, to avoid unwarranted pressure to quickly renew contracts, always be updated with what happens in the licensing space.   

Before you embark on your agreement renewal, make sure you have looked at how best the agreement has served you over the past year (s) and what there is to change or add on.  

Determine the specific software products covered by the licensing agreement and verify that they align with your organization’s needs presently and your roadmap. Pay attention to version upgrades, downgrades, and downgrade rights, as well as any limitations or restrictions on usage. 

Volume licensing discounts in pricing and what you can get 

Microsoft offers volume discounts for large organizations who purchase multiple licenses. Determine the volume licensing discounts applicable to your organization and negotiate for additional discounts based on projected usage.  

To embark on a satisfactory negotiation in connection to the discounts, you should clearly communicate your organization’s requirements, including the number of licenses you intend to purchase, the specific Microsoft products or services you are interested in, and any additional features or support you may require.

You can equally seek the assistance of a licensing expert who amongst other things, will help you purchase a second-hand license that can equally meet your organizational need. Second-hand licenses can help you save hugely on your projected budget. 

As part of your contract discussion, you may ask for flexible licensing options and customized terms and conditions to even include a payment plan.  

Pricing Models and the cost factor 

Evaluate Microsoft’s pricing models and the true cost of their software offerings, taking into consideration any hidden fees and long-term commitments. Seek transparency and negotiate for the most favorable pricing model based on your organization’s predicted usage. 

Conduct a cost analysis to evaluate the financial aspects of each licensing model. Compare the upfront costs, annual payments, and any additional fees or maintenance charges associated with each option. Consider factors like license mobility, virtualization rights, and potential cost savings through consolidated licensing.  

You may consider cloud and hybrid options if your organization is considering cloud or hybrid deployments. Evaluate each licensing model against various scenarios. Understand the licensing requirements for running Microsoft software on-premises, in the cloud, or in a hybrid environment, and assess the associated costs.  

Meeting the contract compliance requirements    

Ensure that your organization’s licensing and pricing agreements with Microsoft are in compliance with their usage regulations and licensing agreements. With your Microsoft contract, conduct ahead an internal audit to verify that the deployed software you purchase will match the licenses purchased. Identify any gaps or discrepancies and take steps to rectify them. 

The Licensing and Pricing Models, if carefully understood, can lead to significant cost savings for your organization. There is the need to know what you want and how to go about achieving it. It is not a “strait-jacket-fit-all” scenario hence there is also the need to consult independent experts who will provide you with varied scenarios to choose from.   

Carefully review the terms and conditions of the EA, including any licensing restrictions, usage rights, and compliance obligations to get favorable long-term benefits.  

Discuss your contract requirements with our team of experts and let’s together explore the options available to you. Contact us today.  

contact form