Microsoft has recently announced that they will be updating their Canadian dollar price list for commercial online services, effective December 1st, 2018.
What does this mean for you?
In this post, we’ll address the most frequently asked questions, so that you’re up to speed on why this is happening and what it means for your organization.
Why is Microsoft Updating their Pricing?
Periodically, Microsoft assesses the impact of local pricing to make sure that there is reasonable alignment across their various regions. In other words, they want to make sure that one area isn’t paying more or less than other areas, and that the pricing between regions is relatively equal.
During a recent assessment, Microsoft noticed a discrepancy between Canadian and U.S. pricing, so, as of December 1st, 2018, they’ll be increasing Canadian dollar prices for online services by 5%, in an effort to realign closer to the global U.S. dollar levels.
This change will not affect everyone. For instance, current business customers who have volume licencing agreements with any products that are subject to price protection will not be affected by this change. However, if those business customers were to add new product additions or new contracts, those new purchases will be subject to the new pricing.
Let’s take a look at the frequently asked questions that Microsoft has outlined to understand how this will change for you.
Frequently Asked Questions on the Microsoft Pricing Adjustments
Below, we’ve outlined some of the frequently asked questions that Microsoft highlighted in their recent announcement. If you have any other questions, feel free to contact our experts, who would be more than happy to help you understand how this will affect you.
Who Will be Affected by the Price Increase?
Microsoft pricing adjustments will be applicable to any new and renewing contracts for those using commercial online services that are available through volume licensing programs. These include:
- Enterprise Agreements (Commercial, Government, Campus, and Enrollment for Education solutions)
- Open Value Agreement (Commercial, Government, and Education Solutions)
- Microsoft Product and Service Agreements (Commercial, Government, and Academic)
- Select/Select Plus Agreements (Commercial, Government, and Academic)
- Cloud Solution Provider (CSP)
- Syndication, and
- Microsoft Subscription Programs (Commercial, Government, Not for Profit, and Academic).
These Microsoft pricing adjustments will not apply to anyone with commercial on-premises software, consumer software, or anyone using consumer Cloud services.
How will this price change impact existing Volume Licensing contracts?
Below, we’ve outlined some of the changes that will impact current Volume Licensing contracts:
- Mid-term Enterprise Agreement (EA), Enterprise Subscription Agreement (ESA), and Server and Cloud Enrollment (SCE): For existing EA, ESA, and SCE contracts, you’ll see price protection on all your previously ordered products. However, any new additions will be priced at the current Canadian dollar pricelist price.
- Renewing and New EA/ESAs: If you are renewing your EA or ESA, or purchasing one for the first time, you’ll see that the price reflects whatever the current pricelist price is. So, for instance, if this renewal or new purchase happens after December 1st, 2018, the price you’ll pay will reflect this price increase.
- Microsoft Products and Services Agreements (MPSA) for On-Premise and Cloud Sales: There is no price protection for those looking to purchase on-premise MPSAs, so current pricing for incremental purchases will be in effect. However, if you currently have online MPSA services, you will benefit from price protection until it’s time to renew your subscription, at which point, you’ll renew at the current pricelist price.
- Open License Agreement: If you are purchasing an open license agreement, please note that there is no price protection, therefore, any orders will be defined by the price list at the time of order.
- Promotions: If you signed up for a promotional rate, your rate will be protected on any pre-ordered services, and you won’t experience a price change during your agreement term.
- Azure customers: See the section below on Azure pricing.
Is on-premises software pricing changing?
No. As of October 2018, the pricing to on-premises software in Canadian dollars will remain the same. If you are using on-premises software, your price will not be increasing at this time.
Will Not-for-Profits and Government/Public Sector customers be impacted?
Yes, Microsoft pricing adjustment will be equal for all categories of volume licensing customers, which includes government/public sector, academic, and not-for-profit customers. However, qualifying charity organizations can continue to benefit from Microsoft’s software donation program, and not-for-profit customers can still take advantage of Microsoft’s special pricing offers.
How will customers be informed of this increase?
Microsoft’s account managers and/or their partners, like ProServeIT, will be contacting their customers.
How Will Microsoft Pricing Adjustments Affect Azure Customers?
The pricing will also increase for those who are using Microsoft Azure. Effective December 1st, 2018, anyone who is purchasing Azure in Canadian dollars will notice that the price level is similar to customers purchasing Azure in U.S. dollars (either through azure.com, or through volume licensing agreements).
Below, we’ve outlined some of the changes that will impact current Azure customers:
- Pay-As-You-Go Subscriptions on Azure.com: As customers under this model enjoy the benefits of no minimum purchase requirements or future commitments with Microsoft, you won’t be affected, but you’ll simply see the new Canadian prices become effective on December 1st.
- Prepaid subscriptions on Azure.com: If you have a previously offered subscription, your prepaid amount, discount, and terms will not change. However, you’ll see an increase in consumption rates that will go into effect on December 1st, 2018.
- Azure in Mid-term Enterprise Agreement (EA), Enterprise Subscription Agreement (ESA), and Server and Cloud enrollment (SCE): If you’ve purchased Azure within an EA, ESA, or SCE agreement, you will have price protection on currently offered Azure services. However, new Azure services that you add or renew will be defined by the price list at the time of order/renewal. Renewing Azure EA customers purchasing in Canadian dollars will continue to have competitive and best possible pricing and additional benefits that are unique to the EA program.
Need More Information on Microsoft Pricing Adjustments?
If you want to know how you’re affected by the new Microsoft Canadian dollar pricing, feel free to give us a shout! Our team of experts can help you walk through what this means for you and how your company may be affected by the new pricing guidelines. Also, check out this PDF from Microsoft for more information on the changes that will be taking place.