Keystone’s Top 10 Tips
Tip #1
That feeling of vendor lock-in and having no leverage is common. So is reaching a deadlock in the middle of the deal. Overcome this by having a deal strategy that includes tactics, tools, IP, and processes that produce an objective data-driven negotiation.
Tip #2
Negotiating the EA is about creating value including cost savings. Everyone wants a discount and a low price. There are many other items of value created by: removing shelfware, finding licensing efficiencies, aligning product selection to IT strategy, getting favorable contract terms, and documenting what you and Microsoft are agreeing to build or fix.
Tip #3
Friends don’t get discounts. If you are constantly friendly with Microsoft and avoid robust and confronting discussions about the price and value… you are not going to get the maximum discounts.
Tip #4
Understand the difference between negotiation and licensing. They are different skills. Being a Microsoft licensing expert does not mean you’re a negotiation expert, it means you know how to read. Negotiation expertise comes from decades of deal making on top of being trained by the best negotiators in the world. Successfully negotiating with Microsoft needs both licensing and negotiation skills.
Tip #5
Don’t forget about On-Premise licensing. With all the excitement about M365, Azure and AI we often don’t put any time into the boring old on-prem licensing. There are multiple ways to license Windows and SQL Server which have a big impact on the price, before your start negotiating a discount.
Tip #6
There are three ways to control the deal: Customer controlled, Microsoft controlled, out of control. The customer needs to frame and control the deal. Microsoft controlling the deal means the customer is going to be selectively shown licensing options that benefit Microsoft. Microsoft are much better at making products than running EA renewal projects.
Tip #7
Microsoft 365 and Azure cost optimization needs to be part of the EA renewal process for two reasons (a) every customer has some wastage in Azure of M365 that can produce cost savings, often finding it is the challenge. (b) Without granular utilization data both Microsoft and the customer will revert to estimates and assumptions about utilization. Here is a test to tell if you need M365 Optimization help: Can you produce a list of named users that have an expensive Microsoft 365 license assigned to them however they haven’t logged-in in the last 90 days, and when they last logged-in what was the usage for each component product (service plan) inside the Microsoft 365 E suite? Knowing the answer means you can objectively measure value which results in data-driven discount requests instead of relying on benchmarking.
Tip #8
Price benchmarking is interesting but isn’t near the top of the list of ways to achieve a successful negotiation with Microsoft. Here is some free benchmarking from a real deal: 38.5% discount for Azure. Sounds high, but this information is only relevant if you know more about who got it, when it happened, their Azure spend forecast, and what competitive leverage they had, and nearly everything else about their Microsoft contract and IT landscape.
Tip #9
Preparation is #1: Being prepared is directly related to the outcome of the deal. It’s not just about starting early. Knowing how to prepare means having a Microsoft-specific negotiation project methodology where each step has a documented process and guidance. Due to the complex nature of Microsoft contracts, products and licensing, preparing without structure means you could be over-licensed (shelfware), under-licensed (non compliant by having incorrect quantities or missing products) or mis-licensed (not buying licenses in the most efficient manner and/or in the wrong contract type).
Tip #10
Hire good help that will dramatically increase your ability to achieve negotiation success. If done correctly the hired help will produce negotiated savings and benefits much larger than the cost of their services.
For further information, more tips and advice, contact Keystone Negotiation
Contact usDiscover the joy of knowledge, one click away
Download your free eBook now