Mistakes in negotiations can be costly – in fact, they could cost you hundreds of thousands of dollars over time, which is part of what makes it so important to avoid the critical mistakes when dealing with Microsoft®. Below is a sneak peek at our Free Downloadable Whitepaper on how to avoid some of the biggest mistakes.
1) Getting a Late Start
Negotiations take much longer than many companies believe – six to nine months is the normal rate for renewals, and initial licenses (especially for uncommon usages) may take even longer. The process is so lengthy because there are many different things to consider, starting with obtaining the data you need, understanding precisely what you want from Microsoft®, and creating the roadmaps to determine what you will need in the future.
You also face the daunting task of looking at things from Microsoft®‘s point of view – and remember that, as a large company, Microsoft® has various plans it doesn’t talk to others about. You must be able to demonstrate that your use of the licenses is in line with Microsoft® rigorous compliance requirements, and that takes time to do properly.
A good rule of thumb is to estimate the time you need to get all of your planning done and increase it by one-third. Taking delays and slippage into account from the very beginning will help you avoid cramming your research in at the last minute and forgetting something important.
2) Negotiating with Poor Timing
Microsoft®‘s fiscal year concludes on June 30, and this does have a major impact on their stance during negotiations. They often run special promotions and discounts around April and May in an effort to improve their final total for the year, and you can take advantage of this to get a better deal. It’s critical that you talk with your reseller or negotiator about the promotions that are available in your area – and if you’re large enough as a customer, you may even be able to convince them to give you a brand-new discount if they don’t normally offer one in your region.
Under no circumstances should you wait until Microsoft® approaches you about renewing the license – this can limit your options, stop you from getting new deals, and restrict the amount of time you have to prepare for the negotiations. Keeping the initiative and negotiating with good timing (as viewed by Microsoft®, not what’s most convenient for you) is a key to success.
3) Forgetting About Future Business Goals
Your business plan should cover three to five years in the future, depending on the needs of your company – those companies dynamically involved in the internet and technology should have a shorter plan (as the changing marketplace will eventually render the plan obsolete), while companies that are more stable can relax and plan further ahead.
It’s important to plan ahead because you may not need the more expensive versions of Microsoft®‘s software. The basic editions are often perfectly adequate, but you will need to consider your upgrade plans, expected product launches, and future needs. On top of all of this, you’ll need to think about what’s actually going to happen with your business over the next few years, including any mergers and acquisitions that might occur. Your license agreement should address issues like these – particularly if you may end up merging or acquiring a company with an existing Microsoft® agreement.
In short, don’t focus all of your attention on your current needs as a business. Plan your licenses for the future, even if what your purchase is less efficient in the short-term – this will save you many headaches in the years to come.