Summary
SPLA Price Increase Effective January 1, 2025
Product | Price Increase |
|---|---|
Windows Server Active Directory Rights Management Services (SAL) | 10% |
Windows Server Datacenter | 10% |
Windows Server Standard | 10% |
System Center | 10% |
Core Infrastructure Server (CIS) Suite | 10% |
Office Suites and Multi Language Pack | 10% |
Dynamics 365 (i.e., Customer Service, Sales) except Team Members | 11% |
Dynamics 365 Team Members | No change |
Dynamics GP, Dynamics NAV, Dynamics SL | 11% |
Dynamics AX | 17% |
Should Microsoft Be Treating Its Long-Time Partners This Way?
Microsoft’s timing and pricing strategy seem to put longstanding partners like CSPs, ISVs, and other SPLA providers in a tough position. The question is, who bears the brunt of these increases—the partner or the customer?
Microsoft has long tried to phase out the Services Provider License Agreement (SPLA) program, which many cloud providers rely on. Yet, regulatory scrutiny—especially from the European Union’s antitrust regulators—has slowed these efforts.
But now, with the announcement of price hikes for SPLA products effective January 1, 2025, Microsoft seems to be using a different tactic: creating financial pressure. By raising SPLA costs by up to 17%, Microsoft indirectly nudges providers towards their cloud programs (e.g., CSPs, MCAs) while positioning it as a response to “market shifts.” This justification feels particularly tenuous as it’s Microsoft, not competitors, setting these new, higher prices.
This price hike is accompanied by an uptick in SPLA audits worldwide. The combination of rising costs and increased scrutiny appears part of a calculated strategy to push partners off SPLA and into Microsoft’s subscription-based services—offering more predictable and lucrative returns for Microsoft.
The real endgame for CSPs, ISVs, and traditional cloud providers? Rising operational costs and increased dependency on Microsoft, ultimately benefiting Microsoft’s bottom line.
For partners wanting to protect their customers, absorbing these costs means sacrificing their own bottom line. For those passing on the costs, they become the unfortunate bearers of customer frustration with Microsoft’s pricing strategy.
Everyone loses except Microsoft. The choices for partners are stark:
Absorb the Costs: Face declining profitability and cut into operational funds.
Pass on the Costs: Risk becoming the “bad guy” as customer frustrations mount.
Is this really the right way to treat long-standing partners who have been critical to Microsoft’s growth and customer reach?
It’s high time that providers recognize this well-orchestrated strategy and weigh alternatives, exploring partnerships or frameworks that enable genuine flexibility rather than steering them into Microsoft’s higher-priced programs. Regulatory bodies must continue to scrutinize these shifts to ensure that cloud providers and their customers are not forced into a market with diminishing choices and rising costs.
Your Thoughts? How Should Partners Respond?
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