Microsoft Pricing to Go up by 10% in October 2018, Here’s What You Should Do About It

On June 25, 2018, Microsoft announced they would soon increase pricing, but what may not be clear is who this change is going to affect. This blog will help decipher who exactly is affected by these coming changes, what effect they can have and recommendations on how to minimize the impact to your organization.


With Microsoft running in nearly all enterprises, headlines of a 10% price increase and removal of volume discounts can cause significant worry. This blog will help sift through the noise and aims to clarify who is affected, what impacts there could be and considers possible ways to mitigate the impact. There are essentially three headlines in this announcement:



What is changing?

Starting with Office 2019, we see a continued nudge by Microsoft to move customers to the cloud. Microsoft states, “these changes will highlight the benefits of our pricing for a cloud-first world”, which is another way of saying, ‘we’re not raising prices on Office 365, just Office on-premise’. This price increase is across the board, so it affects all components of Office 2019, including Visio and Project, Enterprise CAL, Core CAL and server products such as Exchange Server, Skype for Business Server, SharePoint Server and Project Server.

What to watch out for?

Microsoft has a vested interest in moving customers to Office 365 as more customers on Office 365 increase their market share and recurring revenue. There are benefits associated with a move to Microsoft’s cloud-based products, but if your organization isn’t set up to take advantage of them, you could find yourself missing out on opportunities to improve infrastructure efficiency as well as optimize and consolidate licensing. While productivity server product prices will increase by 10%, the RDS per Device CAL price will increase 30% to match the per user price.



What is changing?

Microsoft is simplifying its pricing, which is a good thing. With dozens of different levels, bands and programs, simplification is a welcome change. There are a few key changes:

What to watch out for?

According to the Microsoft FAQ: “The biggest impact will be on small and mid-size commercial customers purchasing through Open Programs (including Open License, Open Value and Open Value Subscription), MPSA, Select Plus, Select, Enterprise Agreement and Enterprise Subscription Agreement, and on government customers. The customer-earned pricing display changes are only applicable to customers with a direct Enterprise Agreement, including Enterprise Subscription Agreement.”



What is changing?

Windows 10 Enterprise E3 offers will be renamed and pricing changed as follows:

What to watch out for?

Organizations that run a lot of device-based licensing will be affected the most – these are most common in manufacturing, nurse/ doctor terminals, etc. This hints at future simplification of the Microsoft ecosystem, where Office 365 and Enterprise operating systems are aligned for true Virtual Desktop Infrastructure (VDI). The general implications for reducing or removing availability for per device licensing matches cloud-based licensing initiatives while attempting to capture more revenue for usage of Microsoft products.


If your EA includes Windows 10 Enterprise E5 per device (which is identical to Windows 10 Enterprise E3 except for the inclusion of Windows Defender Advanced Threat Protection), and you need additional licenses then you have little to worry about in the short term. As noted above, as long as your EA is current, you can continue to purchase the products you have today – even expiring products, at the same price.


When you’re writing the checks, it’s easy to say that pricing increases are bad or unfair. Microsoft notes, however, that in the case of Microsoft Office, this is the first increase since 2010 and represents the value added to the product over that time. Take this change as an opportunity to get an accurate view of what is actually in use in your estate and optimize it. For some, this will be the tipping point to finally embrace a true Software Asset Management practice instead of struggling with cluttered CMDB exports and spreadsheets.

Office 2019 price increases of 10% will result in increased spend for organizations, especially those who are not measuring their usage and reconciling it against what they are paying for. All organizations will feel the pain of price increases, Snow’s technology will help you only pay for what you actually use and help mitigate unbudgeted spend.


Talk to Snow to learn how we can help you save money on your Microsoft estate.