Negotiation and the Timing of a Microsoft Agreement Renewal

By Dan Brewster

Director of Client Services – Microsoft, NPI

August 25, 2016

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Artwork Courtesy of iStock.com/Bizhan33

We are asked all the time whether a client should expect a better deal from Microsoft if they happen to be renewing towards the end of a Microsoft fiscal period (quarterly, annually).

While timing is important, it’s not the most important consideration when structuring the best possible deal from Microsoft. Will you get the “best deal” just because your agreement happens to expire in May or June (Microsoft’s fiscal year end)? Not necessarily.

More important is to ensure that you have thoroughly explored alternatives to Microsoft’s expectation of what you will do. Microsoft, of course, will expect that you will renew your agreement “as is,” with a healthy dose of upgrading to Office 365 E3, perhaps the Enterprise Cloud Suite, and definitely a commitment to Microsoft Azure – this is Microsoft’s most desired outcome.

Microsoft will often wait until your renewal is close at hand to provide pricing to you, leaving little time for a thoughtful review. Customers should counter this risk by proactively taking control of the renewal process. Internally define your most desired outcome (MDO) up front. Ideally, this process should begin at least six months prior to your renewal, and MDO definitions should be completed at least three months before your renewal date.

Then, require multiple pricing scenarios from Microsoft – ranging from “as is” to “super-sized.” This will give you at least three months after getting pricing to perform thorough cost/benefit analysis, and effectively negotiate the best licensing outcome (and best deal) for your business.