Unleash the Power of Negotiation with Microsoft
In this riveting conversation, Daryl Ullman, a former Microsoft insider, spills the beans on the secrets to navigating the treacherous waters of Microsoft license agreements. Discover how to stay one step ahead of the game and emerge victorious in the negotiation battle.
From understanding the Microsoft ecosystem to grasping the rules of engagement, this episode is packed with valuable insights that will have you questioning everything you thought you knew about dealing with Microsoft. Listen as Daryl shares jaw-dropping stories of underprepared customers and reveals the costly mistakes that you must avoid at all costs.
Ever wondered what goes on behind the scenes at Microsoft? Get ready to be blown away by the intricate web of account managers, goals, and incentives that drive their relentless pursuit of closing deals. But fear not, because Daryl also unveils the secret weapon that will turn the tables and give you the upper hand in negotiations.
Learn how to harness the power of timing and wield it to your advantage, whether it's taking advantage of Microsoft's fiscal year-end or strategically aligning your agreements. And for those who've faced the nightmare of Microsoft going over their heads to the CEO or CTO, Daryl provides the ultimate damage control strategy.
Prepare to be enlightened and empowered as you embark on your journey to mastering the art of Microsoft license agreements. Are you ready to conquer the negotiation battlefield? Dive in and discover a world of possibilities.
Alexander: Today's topic is Microsoft negotiations.
Daryl: I'm reminded of a quote from Sun Tzu's "The Art of War," a must-read book. Let me quote one of my favourite passages: "The general who wins a battle makes many calculations in his temple before the battle is fought. The general who loses a battle makes but few calculations beforehand." Now, you might think, "We're not in a war. We're just negotiating." However, the preparation for war or battle and for negotiation have striking similarities. This is particularly true in any negotiation, but with Microsoft, it's even more critical due to their complexity. If you go into a negotiation with Microsoft without doing your due diligence, without a solid game plan, not knowing your BATNA, your best alternative to a negotiated agreement, or who exactly you're negotiating with, you're likely to lose. This is true for any negotiation, but it's especially pertinent with Microsoft because of its size, the complexity of its licensing, and the scale of the deals involved.
If there's one thing to remember from today, it's the importance of preparation. You should start preparing not just a month or two before your renewal, but ideally 12 months in advance, or even more. The level of preparation needed is substantial. So, let's delve into what it means to prepare for a Microsoft negotiation, what you can expect from Microsoft, and how to win this game.
Alex asked me about the kind of game plan you should have. We had a fascinating conversation about going through an internal preparation checklist, understanding how many licenses you have, and examining your inventory. If you don't know what you have, what's installed, what's being used, what you've purchased, and where it's located, you're missing a crucial part of your game plan. But a game plan is more than just knowing your inventory. It's about asking, "What is your strategy? What is unique to your organisation that you bring to the negotiation table?"
Every negotiation is different. It varies depending on your location, and if you're in the US, it depends on the region. It's influenced by the current situation of the Microsoft account team you're dealing with. Are they meeting their sales quotas? How can you use that to your advantage?
What's specific to your business that you can leverage? Are you shifting to Azure or AWS, or are you also involved with Google? These are unique aspects you need to consider. So, a game plan starts with the basics – understanding what licenses and installations you have in your organisation. Then, you build on that. What's unique about your business? What are your business plans? What does your industry look like? You build upon these layers until you have a clear picture of how you want to execute your plan, what that looks like, what you need, and then you develop an execution plan.
Alexander: When you're putting together this game plan, would you recommend something like role-play or a broad group discussion? And thanks for mentioning inventory. I want to emphasise to everyone that in every Microsoft negotiation I've been involved in, being prepared was absolutely crucial. If there's no clear vision of the inventory, Microsoft will pick up on it straight away.
Alexander: They can tell when you're not fully in control. Preparation isn't just a part of the game plan; it's essential. You simply can't afford to overlook it.
Daryl: Let's discuss BATNA. I'm curious: how many of you are familiar with this term? If you're a professional negotiator or have attended a negotiation course, you'll likely know it. For those who haven't, BATNA stands for 'Best Alternative to a Negotiated Agreement.' When formulating your business and negotiation game plan, particularly with Microsoft, one of the most crucial elements is understanding your alternatives. What will you do if you don't reach an agreement? What if you fail to meet the goals you've set within the negotiation? Let's consider an example. Suppose you're aiming to upgrade to Microsoft E5, mainly for a specific security component, perhaps EDR, but there's a budget ceiling. What's your best alternative if you can't meet the necessary price for E5 and EDR? Have you explored other products? Looked at competitors? Started moving in that direction?
Your BATNA could involve alternatives to a Microsoft EA. You need to prepare this as part of your game plan. It gives you leverage in the negotiation. It often instils the confidence that you have another option. When negotiating with Microsoft, if it seems the game is already set and you lack the confidence of having an alternative, you'll negotiate as if you don't have one. Microsoft will pick up on this. They'll sense it. It's crucial to sit down and really understand your BATNA. For instance, if you're planning to move your SAP workload to Azure, make sure you have a backup plan, like moving SAP to AWS.
You might want to start a pilot of AWS within your environment before you begin negotiations with Microsoft. This gives you an alternative for that specific workload. That's a very powerful position. Without it, you're negotiating at a disadvantage.
You've got your BATNA, and you've developed a game plan, outlining where you want to go, what your objectives are, and how you're going to play the game. Remember, when negotiating with Microsoft, it can sometimes feel like you're up against a giant, huge corporation where the best you can hope for is a discount or some minor benefits.
And even then, you might think, "I can't. They're too big." They've set the rules of the game. But it's important to remember that behind that vast corporation are people. Individuals. There's an account manager. She might be new to the company, managing only a handful of accounts.
If that account manager doesn't meet her specific targets at the end of the quarter, meaning if she doesn't get your account to sign on time, she's going to miss her quota. That means, regardless of Microsoft's size, to that individual, you are everything. You, the customer, are paramount.
She or he will need to meet that target by offering you the best service and agreement possible. So it's all about unmasking. What are their needs, who are you dealing with, and what motivates them? You need to do your research. Understand who your account manager is, and who your technical reference or technical account manager is as well. Get to know who manages the team, and who is the licensing manager at the business desk. You need to grasp, almost, I would say, the ecosystem.
Once you understand the ecosystem, you can start to manoeuvre within it. It's all about unmasking the giant. Don't be intimidated by Microsoft or any large vendor. When you get granular and start discussing details with specific people, you'll feel more at ease. You can reassure your boss, as there's often a lot of stress involved. I think corporations are bigger than Microsoft in the marketplace, but when someone from their team talks to Microsoft, their knees shake. Why? Because it's Microsoft.
But at the end of the day, they're just people.
Alexander: Daryl, can I ask you about this? There seems to be a perception among almost all Microsoft customers, except the big ones who've been through these battles and know they can win, that you can't really change anything in a Microsoft agreement. You can't negotiate anything. You shouldn't even try.
With Oracle, people do try. Oracle is very expensive, and people do try, and they do get some concessions. Sometimes, Oracle might sneak something into their agreement in return. Oracle is quite flexible around agreements. Microsoft, however, never really changes the actual text of the contract.
What's your advice? Obviously, you're saying don't be afraid. But how small must you be not even to be able to start negotiating with Microsoft? Where's that threshold where you can confidently go back to Microsoft and say, "You know what, dear Microsoft, I'm not getting value for money. Shall we discuss this?"
Daryl: I'm going to say, it depends. And here's why. You could be an organisation with 500 users – quite small, but let's say your organisation is based in Cyprus or Greece. For Microsoft in Greece or Cyprus, a 500-user organisation isn't huge, but it's significant. So, you've got some negotiation leverage.
If you're a 500-user organisation in the United States, for example, it's a different story. You won't negotiate like you would in Greece. You'll need to involve your LSP or your reseller, depending on who you work with. You'll find specific leverage points to use with your reseller or LSP so they can go back to Microsoft and negotiate or secure some kind of benefit on your behalf.
There might not be changes in the actual terms and conditions of the agreement, the Ts and Cs, the legal stuff. It can be done, but you need to be a substantially larger organisation than 500 users to negotiate terms and conditions, to change legal terms. Again, don't be afraid. If you're large enough, say 15,000 users and above, I've seen it many times. You can negotiate terms and conditions.
You need to set the stage for that and find the right leverage point. You must understand your position in the market and your standing in relation to your country, region, and industry. There are many variables to consider. It's not a one-size-fits-all situation.
Alexander: Obviously, at Microsoft, people have their own quotas and targets. I've heard that if an account manager doesn't meet those targets, they could even be fired. It's quite a brutal culture. Despite being a friendly company, the attitude seems to be, "If you're not meeting your targets, why should we keep you?" That's what I've been told. I've never worked for Microsoft myself.
What I've noticed in working with larger accounts is that the relationship with those account managers is ongoing. They're always on-site. There are technical account managers engaging with technical teams about deploying to Azure, assisting with virtualisation, or explaining the benefits of new security packages or passwordless authentication. And the account manager is always around.
How do you manage that? How do you maintain a friendly relationship because you want to keep up the small talk? You want to understand them as human beings and what drives them. Maybe they have a holiday plan, and you realise they might need a bonus by then. But at the same time, how do you avoid disclosing too much? Because the more they know, the less advantageous your position becomes, doesn't it?
Daryl: Microsoft is incredibly professional in getting to know your organisation. They usually have multiple sources of information, either from their partner ecosystem or the account team working within your organisation. And the account manager, don't be fooled, is gathering data. They have weekly or monthly calls with their entire team, and they know exactly what you've deployed, what you're planning to deploy, and which competitive technologies you're considering. They have a profile on you, and they'll use that profile when they negotiate.
You've raised a very good point. Microsoft, as an employer, is quite aggressive. If you're an account manager, you might lose your job if you don't meet your quota or don't sign that contract on time. I've seen this during my time at Microsoft. I remember, as a young account manager and then as a licensing executive, the immense stress at the end of the quarter or year if we weren't meeting our quota. We knew someone was going to be let go. Always. Someone goes home. They have a policy of refreshing a certain percentage of employees every year. So, someone's always leaving.
If you understand, as we discussed about unmasking the giant, who you're dealing with and their specific situation, that's leverage in the negotiation. That's money in your pocket. It turns the tables from them collecting data on you and understanding your environment to you understanding what motivates and drives that account.
Alexander: Thank you.
Daryl: When Alex and I were discussing and preparing for this live stream, he asked me, "What are the top six mistakes you've seen in negotiations with Microsoft?" I can tell you, it was quite challenging to narrow it down to six because I've seen so many. But let me share with you six mistakes that I see, and I still see them today.
Firstly, there's being intimidated by deadlines. Microsoft is known for imposing deadlines. Your contract is about to expire, and you're going to lose all your software assurance benefits. You've got various workloads running on Azure. You're going to lose that. You'll be in a situation of no service or denial of service. All sorts of unpleasant things are going to happen to you. You're going to lose your discounts.
I've been involved with Microsoft for 20 years, and I've never seen even once – in hundreds of deals, if not more – that if a deadline passes, Microsoft withdraws previous promises or services have been shut down. One of the best strategies is to go past your deadline; you have to manage it correctly. You need to be strong; you need to be prepared. But if it's a tough negotiation, I'm confident in surpassing the deadline because the pressure is immense. In addition to financial or monetary commitments, Microsoft account reps have service and quality goals.
One of those quality goals is on-time renewal. So, if they don't renew on time, they will be penalised with their bonus. Remember that. Don't be intimidated by deadlines.
Alexander: What about the removal of the 30-day grace period? How does that fit with what you just said?
Daryl: Regarding the renewal term? Yes, you can renew later; Microsoft says you can extend your agreement for a year or have a late renewal. And they add, "But there's a catch: you'll lose your discounting if you go overtime; this and that will happen. It's not that you've got a 30-day grace period. It's not an automatic grace where everything's okay."
It comes with a threat. Don't be intimidated by that threat. And again, it depends on whether you're on a CSP agreement, an Enterprise Agreement, or an old Select agreement. There are so many different types and mixes of agreements.
Each one has different terms and conditions. I've seen organisations that don't know what's in their contract. That always astonishes me. You must read your contract before you negotiate. Most organisations just look at their MLS – their licensing statement – and that's it. They don't understand exactly what their terms and conditions are. It amazes me.
Take the time to read the contract. Don't just ask legal to read it. You read it. You'll discover some amazing tricks or opportunities the agreement provides you with.
Don't let Microsoft bypass you. They often go over the negotiation team, especially in large organisations and in complex and tough negotiations. If they're negotiating with procurement or with IT, depending on the organisation's setup, almost always, there is an executive sponsor within Microsoft. That executive sponsor will go to someone with a C-level title and circumvent the negotiation team. You need to be prepared for that. You need to ensure beforehand that you know who that sponsor is, and you need to prepare your executive team. That's what's going to happen.
That's part of your game plan. Because if they go over your head, you're losing; you're leaving money on the table. They will take you by surprise, and they will lead the negotiation.
Alexander: That's a crucial point. I completely agree and have seen similar situations, not just with Microsoft but particularly with other vendors like Oracle. Negotiators would approach top-level executives, take a C-level person to a restaurant, and if they're unprepared, they might sign or agree to sign a deal right there in the restaurant. Then they return and announce, "Guys, I've just secured a fantastic, brilliant deal, the deal of the century."
I recall an incident in London where a person nearly had a heart attack because they'd spent months preparing. And what the C-level person agreed to was far from what they had prepared. It was the opposite. It was a very bad deal, completely different from what they wanted. That's a key suggestion you just made. You need to prepare your C-level people. If that happens, be extremely vigilant and don't sign anything.
What I admire about Japanese culture is that decisions are never made during the meeting. There's always homework. And I think that's the best advice I could give any C-level person dealing with Microsoft. Listen, take notes, say, "Okay, we'll get back to you," and then return to your negotiating team and discuss, "This is what we've talked about. You might like it, you might say, 'I really like this solution. Shall we review it?'"
Daryl: That's excellent advice, Alex. So, moving on to the third point: getting confused about the role of your LSP, your licensing provider.
The LSP often appears as your partner, someone on your side, with your best interests at heart. I want to challenge that perception slightly. They have their own interests, and primarily, they have Microsoft's interests at heart. They are a Microsoft partner. They have quotas from Microsoft. Behind the scenes, you should be aware, they are compensated by Microsoft for each deal they close. They also receive payment for certain products included in the agreement. So, if Microsoft is promoting a specific product, your LSP has an incentive to get that product integrated into your organisation, into your agreement.
You can't be sure if they have a backdoor to Microsoft. I've been in negotiations where the LSP was brought in as a confidant, and they had a back channel to Microsoft because they shared the same agenda. So, be cautious with your LSP. There are strategies to turn your LSP to your advantage, to use them as leverage. Nowadays, an LSP can sell an Enterprise Agreement, but if you sign a CSP, which is becoming very common, multiple resellers can compete for the same business. If your LSP thinks there's no competition, you can inform them that you're considering signing a CSP and talking to a few other resellers. This changes the dynamic; they no longer have an exclusive relationship with you, and they might step up to help you secure a better deal.
So, think about how you can leverage your LSP next time.
Another point is starting late. We touched on this at the beginning. Don't start a month before. Don't start three months before, or you've already lost. Aim for a minimum of six months' head start because the process is so complex and extensive. If you can start 12 months beforehand, that's even better.
Microsoft has a very well-structured T-18 plan. Their account team starts engaging with you 18 months before your renewal. They're introducing new technology, embedding incentive funds within your organisation, and getting partners to engage with you. That's part of the renewal process. The negotiation has already begun 18 months prior to your renewal. You might not have realised it, but they've already started, so you should too.
Daryl: The next point is about letting Microsoft take the lead. In any negotiation, you mustn't let the other side set the tone. Don't let them sit in the driver's seat and steer you in their desired direction. They'll guide you towards E5 with all its new security components. You might not need it, but they'll lead you there and set the tone. You should set the tone; tell them what you want. It's part of your game plan. What do you want from Microsoft? Tell them, "Don't send me a proposal for E5. I'm interested in E3, maybe with a bit of E1. Don't start with E5." Once you start there, it's very difficult to backtrack.
So, don't let them lead. You lead. It's your negotiation, your company, your project.
Number six: Sending Microsoft raw data. This might seem trivial. You might think you wouldn't do it, but perhaps someone in your IT department, a technical staff member, has a good relationship with the Microsoft technical account manager or one of the partners. They might casually, over coffee, open up their Flexera, License Dashboard, Snow, or whatever tool they use. They might start discussing Active Directory numbers, the number of Visio deployments, or updates on your SQL Server estate.
Your data is leaking. That gives Microsoft an advantage. It's not just about sending an email with your raw data. It's about ensuring your technical team isn't sharing sensitive information and that the wrong people don't have access to your data. You want to control the flow of information.
I'm not suggesting you keep secrets or be under-licensed. But if you're cleaning up your environment, or undergoing a significant project like moving, downsizing, or changing your server environment, you don't want Microsoft to know about it prematurely. You want to manage these changes discreetly. It might take longer than anticipated. You don't want to give them any leverage. Be vigilant about data leakage. It can put you in a difficult position when it becomes known. And it does get out. I've seen it happen multiple times.
Alexander: I've actually seen data leak through a casual connection between a Microsoft tech and a tech from another company, bonded by a strong friendship. It's important to remember, though, that the person from Microsoft might still have an agenda to sell more to you. Sometimes, their excitement about new technology can unintentionally lead to them identifying a sales opportunity for something you're lacking, from their perspective. So, it's not just about them pushing a product on you; they understand your potential pain points, sometimes even better than you do. Obviously, controlling your information flow is key.
Daryl: Now, regarding Microsoft's culture, this is often massively overlooked. We've got listeners from Europe, the US, and all over. When you're dealing with Microsoft, whether in Belgium or South Africa, you might think you're interacting with a local mindset. But it's crucial to remember that Microsoft is an American company, driven by American business culture. This has a huge impact, especially in negotiations.
In my experience, Americans tend to be more forthright in negotiations, particularly around pricing. Europeans, in contrast, often focus more on legal terms, conditions, and usability. Americans are typically quite direct and comfortable discussing pricing, discounts, and payment terms.
Understanding that you're essentially dealing with American business culture is vital. The differences in negotiation styles across cultures are significant. For instance, the approach in the US differs from that in Japan in terms of hierarchy and business conduct. Microsoft operates through regional business desks, which then report to the US desk if necessary.
Discount negotiations in the US can sometimes be more assertive than in Europe, and it varies by country. Belgium is not the Netherlands, which is not France, which is not the UK. My US colleagues are often more aggressive in negotiating discounts compared to their European counterparts.
So, keep this in mind. If you're looking for insights into cultural negotiation tactics, there's plenty of information available online, or you can contact me directly. Remember, even if you're negotiating with someone in France, they likely report to an American boss. That's the person you're really dealing with.
Alexander: Say you are in Cyprus, and you talk to the local account manager. So, your deal is still approved by the States, isn't it?
Daryl: Many times, yes. It goes up to the regional business desk. It could be in Turkey, or it might go to Ireland. They've restructured a bit, so now Ireland has a business desk that oversees Europe. But if it's a really big deal, it'll go all the way to the US. And in Ireland, the people managing the business desk are sometimes Americans. Or the rules, the empowerment rules, something you need to remember - Microsoft has "empowerment" rules, which are set by corporate, by US corporate. It's not local; it's corporate America.
I've been a shadow negotiator for over 15 years. Often, when I work with customers, I operate in the background, in the shadows, because nobody really knows I'm there. It works really well. But you must remember, when you're negotiating with Microsoft, there's someone behind the scenes, behind your account team, pulling the strings. That's why I want to talk about shadow negotiators.
Shadow negotiators can be consultants on your side, but many times, the people you're negotiating with aren't the actual decision-makers. There's someone on the Microsoft team, a shadow negotiator, who's really pulling the strings and making the decisions. This ties back to the beginning of the presentation when I spoke about unmasking the giant.
Empowerment holders are not only decision-makers because Microsoft has a very structured empowerment list. Each role has a different set of concessions that specific people in the organisation can provide. You might see them as decision-makers, but often, they're just there to sign off. So, the Microsoft team needs to present a strong business case. You need to help them with that business case so they can act as your agents, your ambassadors within the organisation, to reach those empowerment holders if you can't, and represent your best interests.
Daryl: Put yourself in their shoes. This is an exercise I recommend doing regularly. You can even do it at home with your spouse. Imagine that you are an account manager with a quota to meet. Your job might be on the line, and that bonus you're aiming for might slip away. It's an enormous amount of pressure. So, put yourself in their shoes and try to envision selling to yourself. This exercise sets a psychological frame for understanding their thoughts, strategies, and negotiation approaches. It's a bit of a mind game you can play with yourself.
Take your notepad and jot down ten things that you believe your account team is considering when planning your negotiation. This can be incredibly powerful.
Imagine that you've already negotiated the deal, and promises have been made. Some were verbal, some in emails, and others were in the actual proposal. Then, Microsoft returns with their standard agreement and pricing, asking you to sign it. You inquire, "Where are all those great benefits you promised? Incentive funds, migration assistance, special terms and conditions on audits?" They assured you they wouldn't audit you in the next 12 months. "We'll take care of you. Don't worry. Nobody's going to audit you." But it's not in the contract. If it's not in the contract, it doesn't exist. No side letters, no verbal commitments. If it's not in the contract, it simply doesn't exist.
I've encountered issues with future pricing, for example. You may want to lock in a future price for a product you intend to roll out extensively or new technology you plan to purchase later. Let's say you negotiated a 25% discount on SQL Server specifically in your agreement, and you asked your account team to ensure you get the same discount when you true-up in the future. "Not a problem. I'll take care of you. You'll get that 25% discount."
However, that person may not be there in a year's time. No one gives a 25% upfront discount on TrueUp; I can tell you that. It's never exactly the same as the discount you receive when signing up for software assurance, and that person hasn't gone through the business desk for approval. If they promise you a TrueUp discount on future purchases, ensure it's in your agreement. Make sure it's in your Customer Price Sheet or in the contract. Not verbal, not in email. Keep that in mind. Get everything in writing. If it's not in writing, it doesn't exist.
Alexander: I would also recommend, because that occurs post-negotiation, when you receive all your agreement paperwork, keep every single document because almost all of them, except for the framework agreements, are vital. There might be notes, and especially bespoke terms, in a CTM addendum. Never misplace them. You'll need them all the time - for internal reviews, in case of audits, to show to auditors because they won't have the data. They might go back to Microsoft and ask them to provide it, but they'll expect you to have everything.
Whatever you agree to during the negotiation, get it in writing, and then keep it.
Daryl: How many times have we seen, Alex, from your experience, when it's time for a renewal, and you ask the customer, "Please provide me with your documentation from your previous agreement." And they come back saying, "I have no idea where my contract is."
Alexander: Every single time. Same story.
Daryl: It's amazing because without knowing what's in the contract, you don't know your terms and conditions, whether there have been any amendments, you haven't got a clue. It's so basic. What I've seen is that when a contract is signed, it goes into a virtual file, and all the benefits within the contract are not even realised.
For example, classroom rights. I don't know how many people are even aware that there are free classroom licences for your educational facility within your organisation. How many people know there are 20 licences? 20 licences can amount to £20,000, £30,000, or even £40,000. There are server licences. There's Microsoft Project. There's Visio that can be used. Nobody actually knows that. And they go and they pay another £20,000. Let's just give Microsoft money. It's all there in the contract. There are a few more things people don't read in the contract, and as a result, they don't utilise the benefits they actually have. And that's just a very small example. Please read the contracts and make sure you implement the benefits you receive.
Alexander: When you're not utilising those benefits, and Microsoft is talking to you, they are aware of your infrastructure. They know you're not using those benefits. It's another checkbox: "the customer is not utilising all the benefits of the Enterprise Agreement. Maybe they haven't read it. If they haven't read it, they're not prepared for the negotiation."
You can basically say anything, and it'll be taken at face value. Just a recent example, by the way, about not reading your own agreements. A customer had a very favourable concession put into the Enterprise Agreement, something fantastic, something substantial, with a caveat Microsoft also managed to include. They tied the Product Terms to a specific date.
Alexander: Did they know that they were going to change the rules? Did they not know that they were going to change the rules? But after that agreement was signed, Microsoft allowed third passive instances of SQL Server in Azure.
The customer, when they read the Product Terms, they thought, okay, fine, we can now deploy free instances in Azure. However, because their Product Terms were in writing and fixed to that date, and they never read the CTM, they remembered the good bits but never looked at the bad bits. In the end, they became non-compliant because of that. And they had to go into a very exhaustive mid-term negotiation to fix that. You don't want that.
Whatever you agree to, even before you go to negotiation, reread the contracts. And then when you get all that, reread it again. Make sure whatever was promised to you is in writing, and then keep it in a safe place. I can't stop repeating that. It's very important.
Daryl: And I agree.
Microsoft's last quarter. Their fiscal year ends at the end of June. If you've got a renewal at hand, I think you understand that this is when things potentially can get ugly. Ugly because they're under a lot of pressure to close the deal. They don't want it to go into the next year. As we talked about account manager goals and incentives.
But on the other hand, this is an opportunity for you as well. Even if Microsoft is putting a lot of pressure on you, you come to the negotiations calmly. You breathe. It's really key. You have to be calm.
Doesn't matter how much pressure Microsoft puts on you, you need to breathe. Because if you breathe, the pressure goes back onto Microsoft. You've got time; don't stress it out. Meet those goals that you've set out to achieve.
Alexander: Can you actually use that to your advantage? Because one of the things in my negotiations playbook is if a customer is in a good position, if they're well-prepared, the game plan is fully outlined.
Say their renewal is actually in August. Can they actually agree on an early commitment, early renewal, whatever the name is, to use that as leverage to get additional discounts because, folks, you want the bonus, you want to close your financial year? How about you give us a bit of breathing room here? A bit more, but we'll sign all the papers now. Is it something that you've ever used or you suggest doing? Because you have to be careful with that.
Daryl: So first of all, you're giving away all my secrets, but it's out there, so let's share it. You're absolutely correct. That is very powerful. It's not only about not being intimidated by deadlines; it's about playing the game in reverse.
An early renewal is highly compensated within Microsoft. So if the account team brings in an early renewal, first of all, they'll be compensated internally, but they will reward you. You can get additional benefits by bringing it in early, so you need to play it carefully.
So August, bring it into June. It works really well. You need to see where your agreement falls. Or you might have multiple agreements. Or you have gone through a merger and acquisition. I haven't even spoken about mergers, acquisitions, or spinoffs, where things get really interesting when you have a couple of agreements, and they have different end dates. You have a CSP. You have an Enterprise Agreement. You have old Select licences that you've got from another company that you've just purchased. We can get into more complexity because it really doesn't end there. And you want to consolidate everything. What an opportunity to negotiate! What's the timing for that?
Every negotiation is unique. Every customer case is unique. It might seem generic sometimes. It's not really generic. It's got the same rules of engagement. Do you understand the rules of engagement? That's where the game plan comes in. And understanding the ecosystem and some other things we discussed and the culture. And if you find that very specific leverage point that's unique to your organisation, you bring it to the negotiation table. That's where the difference is going to happen. That's where the magic is going to happen in the negotiation.
I always get questions about discounts. What discounts are out there today? Can you receive a discount? We've heard Microsoft isn't providing discounts. You can definitely receive discounts. They haven't gone away. It's tougher than before. It's tougher to negotiate, but using the right leverage point to find that unique proposition within your organisation, you can definitely leverage and receive higher discounts or improve terms and conditions than Microsoft might want you to think. Negotiate. Don't be intimidated, not by Microsoft, not by Oracle, not by SAP, not by any vendor, regardless of the size. You are unique.
Alexander: We have one question from Ruslana, which is what do we need to do if Microsoft goes through our head and to the CEO or CTO directly? What if they did, and you didn't prepare the C level?
Daryl: If they've already done that and you weren't prepared, you are in a tough situation. They've already circumvented you. You need to engage your CEO and or C level, whatever that is, very quickly.
You need to make sure that they go back to Microsoft, and this is about you managing the relationship internally. They go back, and they push back, and they say, this is not the right time for us to engage with you. We'll be very happy to have this conversation once my team provides me with final approval that most of the points have been agreed upon.
I've got my team. They're doing a fantastic job. I have full confidence in them. Once they finalize it and there are some issues to close, I'll be happy to have this conversation.
So that's what I will do in a case where they've already gone over your head.
Alexander: Thank you, Daryl. Thank you for being with us today.