It’s no secret that Microsoft® wants to move their customer base from perpetual licenses to subscriptions. We often see them offer attractive pricing and terms to motivate customers to embrace cloud-based products such as Office 365™ while refusing to offer similar incentives to those wishing to purchase perpetual licenses.
On October 1, the Price List will reflect a less subtle incentive. Office 2019, which is due for release in that approximate timeframe, will come with a ten percent increase over current on-prem pricing. Of course, Microsoft defends the increase, claiming that it reflects the increased value of the product, but we haven’t seen similar increases for Office 365. Pricing for on-prem server products and Enterprise and Core CALs will also increase by 10%.
Windows™ 10 Enterprise E3 will also undergo changes. Beginning in October, E3 will refer only to per-user Windows 10 licenses and will be referred to as Windows 10 Enterprise E3. E3 Device licenses will now be named Windows 10 Enterprise. Both will be priced identically, which means the price of Windows 10 Enterprise will receive an increase to match that of E3.
It’s quite possible that Microsoft will adjust the price of Office 365, but we haven’t seen anything official to address that.
The price increases for perpetual licenses are consistent with Microsoft’s public strategy to move their customers to the cloud. We often see aggressive discounting to motivate customers to abandon their perpetual licenses. This can certainly benefit organizations who are moving to the cloud, and should be highly leveraged during negotiations, but it’s important to remember that once that transition occurs, future discounts may not be as attractive.