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Approaching a Microsoft Enterprise Agreement Renewal

In a candid and insightful interview, Alexander Golev, a recognised authority in enterprise software licensing, sits down with Service Management expert Jeffrey Tefertiller.

With a wealth of experience in Microsoft Enterprise Agreement renewals, Alexander offers you invaluable insights and real-life strategies to tackle the cost pressures you might be experiencing.

How to become efficient with licensing and Cloud cost reduction?

Jeffrey: There's a focus, with Microsoft, to move to 365, to move to Azure. And organisations with large Microsoft footprints are feeling this pressure for cost reduction. How can we get more for less? How do we become as efficient as possible? How would you recommend somebody who's feeling these cost pressures?

Alexander: If you want to put it in one word, it's 'analyse'. You'll be surprised. One of the reasons I like my profession is that it almost feels like I'm a magician. There's always something I find that stuns people. "Did we actually sign this? Do we have this license we're not using?"

There are various ways you can save. You can profile your users correctly. That not only applies to Microsoft. Look at SAP and Oracle applications. How do you optimise user licenses? You look at what users are using and what they should be using, and what they shouldn't be using, and then you optimise.

That's how you cut costs. Especially in an Office 365 and Azure-based world where the taxi meter is ticking. Whether you're using the taxi or not, it's there, and it's ticking.

Analyse and optimise.

The Value Gap

Alexander: There's a big difference between 'want' and 'need'. Ask yourself a question, "Do you want the security features of E5, or do you need them?" Maybe in the next three years, you don't need them. Maybe you're still using your other third-party security suppliers. Why would you pay twice?

When Microsoft offers you E5, use it as a 'value gap'. "I'm already paying a million pounds, million dollars per year for a third-party solution that won't expire until this day. Dear Microsoft, I'll take it. I like it. But I don't want to be paying twice for the same features, so give me a discount for that period until my other contracts expire."

We naturally buy more than we need

Alexander: And what shouldn't be forgotten is there's always dead weight. There are disabled user accounts and inactive users. You can reduce software editions [by replacing them with less expensive ones].

It's in human psychology to buy a bit more than you actually need.

Jeffrey: Yes. We always buy 'room to grow' as though Microsoft won't sell you what you need along the way. They're happy to [do so].

When is it too late to negotiate a renewal?

Jeffrey: If an organisation has a renewal coming up, another cost pressure, a very tense one. Millions of dollars. Millions of pounds. Microsoft comes in and says it'll be X per cent more because it's never less, never the same. It's always more. How would you advise to prepare for an upcoming renewal besides doing it early?

Alexander: "If you start late, you lose that cutting edge of being in full control, but not everything is lost. If your renewal is in three months, I'm not saying you can't save. But then you need a proper strike team that will do that in a couple of weeks.

Look at a high level where you can save, how to profile users, and what things you don't need. Look at those shiny things you don't need to buy. You only want them. Then we can take them off the list.

The closer you are to the renewal, the less you can save, the more expensive team you need to hire. You will still save.

You can probably negotiate certain things [in an extremely short timeframe], but Microsoft is the toughest nut. It is very difficult to get a discount from Microsoft unless you're fully prepared. Their salespeople are trained daily on how to sell and negotiate. You are not.

The earlier you start, the more you'll save. The ideal [start] is the 'T minus 18', 18 months before the renewal. Almost nobody does that. It's too far ahead. It's in the future. Start six or nine months prior.

Savings vs Optimisation + Collateral Savings

Alexander: I don't like the word saving. I like the word optimisation or reallocation of the budget because there is always something you need to implement. There's always something you don't have money for. But we can take that money from the things you don't need and put them into things you need.

What you find [in addition], if you start just a bit earlier, is collateral saving.

I have an example, a past customer. They saved £ million on licenses, and they saved more than £1.5 million on reducing electricity bills, hardware support, and third-party support. That was my first experience when somebody actually demonstrated to me that the saving that you achieve through optimising the infrastructure is not only in licensing. The majority [of savings] is not in licensing, [it's] in other things.

Renewal approaching? Talk to an expert

Are you facing the same challenges in managing your Microsoft Enterprise Agreement renewals? You don't need to face them alone.

Contact us today for guidance on how to analyse, optimise, and save on your enterprise software licensing. We can help you turn the pressure of license management into an opportunity for budget reallocation, efficiency, and growth.