Tip: Negotiating a Volume Agreement

Although the rules for volume license agreements are generally well-defined, Microsoft’s sales and licensing personnel do have some latitude in shaping specific licensing agreements, including their price. The following tips can help customers negotiating new volume agreements.

Try to negotiate. You won’t get what you don’t ask for, so customers that want a sweeter deal should not be afraid to ask for a bit more. Microsoft’s field staff have a small amount of negotiating room; larger discounts require approval of more senior managers. Success is not guaranteed: Microsoft prefers to stick with a specified program whenever possible, but other circumstances, such as competitive threats, the need to close sales at some times of the year, customer reluctance to renew a licensing agreement, or general resistance to certain products and programs, can convince the company to bend.

Consider non-licensing concessions. Microsoft’s sales force has a number of other incentives that preferred customers can sometimes win, and that offer genuine value to customers even if they don’t negotiate lower licensing fees. These include consulting services, training and technical assistance, financial incentives to adopt new and unproven technologies, Microsoft-sponsored case studies that provide some public relations benefits, and meetings with senior Microsoft managers, in which customers can learn more about the company’s strategies, product roadmaps, and the likelihood that Microsoft will address particular technical problems that the customer is encountering.