Balancing your need to control costs, have room to flex, or do a bit of both!
Ever taken out a home loan? If so, you’ll be familiar with the fixed vs variable home loan decision.
If you’ve taken out a loan over the last 5 or so years, you may have been very tempted to lock in a fixed rate home loan with talk of higher interest rates starting to hit the news daily. You may have stayed variable to make sure you had some flexibility to access or change your equity or access to funds over time, or opted from some combination of the two.
Your choice was likely driven by your need to balance the flexibility you might need with current cost factors; with flexibility comes a cost premium and with surety comes terms and conditions, early exit costs and implications. But how on earth, you may be thinking, does this relate to my organisation’s Microsoft licenses?
Fixed vs Flexible Licensing – The New Microsoft Billing Model
In February 2022 Microsoft commenced the transition to its New Commerce Experience (NCE), and early last year, your managed service provider would have reached out to discuss moving your Microsoft license billing to either an Annual model, which locked in a lower per-license price, but restricted the changes you could make over your 12-month subscription term, or on a more flexible Monthly model, which how attracts a 20% extra premium.
This change also coincided with the 2022 increase in Microsoft’s baseline prices as well.
Your Maxsum Account manager would have worked with your IT manager or contact early last year to take advantage of some special introductory offers that were available at the time to lock in pre-price rise baseline prices until February 2023 when the new baseline prices across the board, as well as the 20% premium on Monthly billing would kick in.
End of the Introductory Price-Lock Offer Period – What does this mean for our Microsoft License costs and flexibility going forward?
As we explained last year, taking advantage of the Introductory offers delayed further decisions around your Microsoft licensing until February 2023. If your current Microsoft Monthly or Annual subscription term is renewing now, please note that from March 2023 onwards,
- The new higher Microsoft baseline price will apply to your licenses irrespective of whether you are on a Monthly or Annual billing option
- The planned 20% Microsoft premium will now be applied additionally, on top of Monthly billing
If you are a Maxsum Managed IT Services client and last year opted into the upfront Annual billing option, your Maxsum Account Manager will have undertaken a recent review of your current licensing, and will reach out to you over February – March 2023 with a discussion about your current and future licensing needs, what the new price points will be, and what the best option or combination of options might be for you over the next 12-month term.
If you opted last year to remain on the Monthly billing option, from March 2023 please note that the Microsoft baseline price increase and the 20% monthly premium will be applied to your licensing costs for the next 12-month term.
Whether you are a current client, thinking about Managed Services, or just hold your licensing with Maxsum, feel free to reach out to our team on 1300 629 786 or Contact us here discuss the Microsoft Licensing 2023 price changes and what the best solution might be for your organisation based on your need to control costs, flex or do a bit of both!
*Please note that all Microsoft baseline price rises, as well as the 20% premium now added to Monthly billed licensing options, are part of a global pricing and billing model change made by Microsoft during 2022. You can review more details around Microsoft’s new pricing for Microsoft 365 here.
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