Alert: Microsoft Price Hikes Coming This Summer

Effective July 1, Microsoft intends to hike prices on standalone Enterprise Mobility + Security (EMS) E3 from $9 to $11 per user per month, and standalone Intune from $6 to $8 per user per month. The move will increase product costs by 15% and 25%, respectively.

The vendor asserts that it has made “significant feature enhancement investments” in the products over the last 18 months, to better enable customers to work safely and productively from home. Microsoft -- late to the security marketplace -- wants to be your one-stop-software-shop and displace established players like Symantec, Proofpoint and McAfee, whose products are in high demand in the wake of COVID-19. Microsoft’s EMS provides security for mobile devices; Intune is used to push out patches, updates, track devices, and is touted as a mobile device management tool.

We suggest the steep increases are intended to push customers away from a la carte spends and towards Microsoft bundled solutions (M365), which include many products that may be under-utilized but serve to significantly build long-term spending. (Meanwhile, the vendor is not changing the price for Microsoft 365, which contains EMS E3.)

What can customers do today to prepare for these increases?

We suggest buyers immediately inspect their usage as well as their product roadmap to determine demand and create leverage prior to your next conversation with Microsoft. Bear in mind that it may be years before your organization needs all the software that comes with the M365 bundle, and buying it too soon comes with significant financial risk because there’s no way to remove the excess software. It is also important to understand that Microsoft sales reps are compensated on what your organization uses, so this information can be useful as leverage during your deal planning and negotiation.

Incidentally, Microsoft has a history of using price hikes to move customers with perpetual licenses to its cloud offerings; with the July price hikes, the vendor is using a cloud-based product to boost cloud spending.

For more information about strategic deal preparation before your next Microsoft engagement, read our blog titled Leverage: The Key to Every Deal on our website, view our portfolio of Microsoft content, or contact your ClearEdge representative.

- Steve Paradis is ClearEdge’s Principal Licensing Specialist.