MICROSOFT PRICING OVERVIEW
Microsoft is one of the most difficult suppliers to negotiate with, consistently inflicting price increases and premiums on their customers. This document shines a light on Microsoft pricing tactics, discussing ways to achieve competitive discounts and mitigate Microsoft risk.
This Microsoft pricing report will focus on the following topics:
1. Microsoft Pricing Statistics
How does Microsoft price in comparison to their competition? We detail the average Microsoft price increase experienced by their customers across hundreds of observed deals, and other pricing statistics such as price variance and gross margin per license sold. This section sets up the document to illustrate how successful Microsoft is at their pricing strategy, consistently pricing customers at premiums and maximizing their revenue per transaction.
2. Microsoft Pricing and Discount Percentages
Provided in this section is a detailed table highlighting the average Microsoft pricing across all major Microsoft product families. This table provides transparency into the price ranges we have observed over the last year, exemplifying the large range in discounting offered to customers. Though many customers may find themselves in these ranges, this section explains that the best deals include discounting that exceed the highlighted range, and with proper planning and negotiating leverage any customer can improve their Microsoft price.
3. Microsoft Pricing Tactics and Risks
Microsoft uses a number of pricing tactics to ensure they win deals, maximize margin, and increase costs for the customer. This section details three unique Microsoft tactics used in their licensing model that can present pricing-related risk for customers:
Microsoft Product Suites: Microsoft commonly bundles product modules into suites to hide necessary pricing details and to lock customers into higher costs for additional functionality they may or may not need. This lack of transparency translates to future premiums inflicted on the customer without the need for price justification.
Microsoft License Demand Inflation: Microsoft sales reps will commonly inflate the number of licenses included in a proposal to maximize costs for the customer. This section details tactics to use to identify hidden demand inflation and ways to mitigate this Microsoft pricing risk.
Microsoft Deal Timeline Manipulation: Microsoft sales reps are extremely skilled at manipulating the deal timeline to favor them in negotiations, such as accelerating or decelerating the deal clock. We discuss how this can impact your organization and the best way to prepare for price negotiations with Microsoft.
4. Microsoft Price Incentives
In the last section of this Microsoft pricing report, we detail the top three motivators for Microsoft sales reps. If a customer understands the incentives and compensation plans for a Microsoft rep, they will have all the tools needed to form a negotiation strategy for the Microsoft purchase. We dive into how compensation for Microsoft reps are calculated, applicable bonuses achieved through specific deal scenarios, and which Microsoft products hold a higher weighted value for a sales rep’s compensation.
To increase your chances of achieving higher Microsoft discounting and lower costs, this document will aid you in identifying competitive pricing, Microsoft pricing strategy, and Microsoft sales rep incentives to facilitate movement on your bottom line. For additional assistance on your Microsoft purchase, review some of the other ClearEdge resources listed below to help plan your strategy and mitigate risk.