On-Premises License Prices Increase 10% or More

• On-premises license price increases will give customers further incentive to move to cloud services.
• For Enterprise Agreement customers, impacts are delayed until next contract renewal.

License prices for many popular on-premises products—including OSs, Office suites, and server applications—increased 10% or more in Oct. 2018, while pricing for comparable online service offerings remained constant. These changes are part of Microsoft’s ongoing strategy to incent customers to move from legacy license approaches to hosted “cloud” services. Contractual price locks protect Enterprise Agreement (EA) customers from the price change until their next subsequent contract renewal, but new purchases made through Microsoft Product and Services Agreement (MPSA) and most other volume licensing programs were affected immediately.

Windows Enterprise licensed Per Device. The cost of licensing Windows Enterprise on a Per-Device basis increased from 5% to 30%, affecting both Windows 10 Enterprise (Per Device with Software Assurance) and Windows Virtual Desktop Access (VDA) Per-Device licenses. This increase makes each Per-Device license option roughly the same price as its Per-User counterpart (Per-User license prices remained unchanged). The large percentage range was largely due to Microsoft’s decision to offer less aggressive programmatic discounts to larger customers. Price level A customers experienced the smallest percentage price increase, and price level D customers (that is, the larger customers) saw the highest. For Per-Device licenses, moving up price levels (from B to C, or from C to D) now results in only a 3% savings rather than the 7% savings offered previously.