A little more than three years ago, we authored an article on the pain and suffering enterprises were experiencing as they were being transitioned from Microsoft Premier Support to the new support offering, Unified Support.
Back in 2019, many customers were seeing the cost of support proposals increase anywhere from 50 to 300%. To ease the transition, Microsoft often provided “investments” that were meant to mitigate the sticker shock and officially bring their customers into the Unified Support fold.
Fast forward to 2023 and those early Unified Support agreements are now at a renewal milestone. The customer memory of those earlier investments made by Microsoft to reduce the transition cost to Unified Support is long gone. Once again, enterprises are seeing what appears to be support cost increase of 50 to 300%. It feels like déjà vu.
Enterprises require support to address design and operational problems they experience with Microsoft products and services. These problems, when reported by customers, spawn what are commonly known as support incidents. Microsoft’s legacy support model, Premier, adequately addressed customer needs as they related to funding the forecasted costs to cover the support incidents for the enterprise.
How the Unified Support Program Pricing Model Works
While the architects of Unified Support would likely disagree, its pricing model is effectively a “tax” on customers’ product and service spend. Many agree that Microsoft is adept at fixing things that aren’t broken and that the support program Premier was not, in fact, broken – it just did not generate the revenue growth Unified Support is capable of generating.
Enterprises that have worked with Microsoft through the Premier Support days and into the current Unified Support era are nearly unanimous in their assessment of the quality of support before and after the “upgrade.” A program funded at the levels of Unified should deliver best-in-class support; according to many ISG clients, Unified Support does not meet these expectations.
Where is Microsoft leveraging all this increased support cost revenue? It turns out that Microsoft can describe its Unified Support model in two categories: Reactive Support and Enablement Services. Reactive Support is essentially a rebranding of Premier Support, which included the option of adding Enablement Services if needed. But Unified Support takes the optionality of Enablement Services off the table and instead makes those services essential to the agreement and to the ability to moderate the costs going towards Reactive Support. This is where the program begins to unravel with respect to cost and freedom of choice.
Microsoft adds up the totality of their customer’s spend across three categories: User Services, Servers and Azure. Each of these categories can contain a variety of products and services that can vary in sophistication and functionality, with some being more prone to complex support incidents than others. A dollar spent on a low-level, simplistic service is weighted the same as a much more complicated service.
This pricing calculus does not take into account how enterprises are leveraging user subscriptions across both information workers and frontline workers. We have seen transactions that allocate the majority of user spend to limited-use frontline workers rather than the more sophisticated services extended to information workers. In these circumstances, the cost for Unified Support still increases as if support incidents for frontline workers would be as frequent and costly as those for information workers.
A More Transparent Unified Support Pricing Model
Enterprises need Microsoft to revisit how they calculate support costs and move toward a SKU-based support alternative. While other alternatives could be considered as well, a SKU-based option, designed as an “add-on,” could be directly associated with the degree of sophistication of the subscription spend. Products that are targeted as casual and lightweight use cases can then have a separate and more appropriately priced support add-on.
In all cases, the decision to include the support add-on SKU for any subscription would be optional. If an enterprise wanted to support a specific subscription, then it would need to include all instances of that subscription. Microsoft could design multiple support add-on SKUs for any subscription that could selectively address Reactive Support, Dedicated Support and/or Enablement Services.
The Unified Support pricing model of today lacks transparency and relevance for the products and services it purports to cover. Only by targeting the subscriptions that are going to be consumed can the cloak of obscuration of costs be lifted. Until such time as Microsoft accepts this reality, enterprises will need to engage in complex negotiations with Microsoft to sort through the apparent lack of price-to-value that Unified Support agreements provide today.
Enterprises cannot stand by and wait for Microsoft to redesign Unified Support. They need to plan for these difficult scenarios and determine how to manage the risk of doing business with Microsoft. Working with a qualified advisor can help you understand how to avoid unexpected surprises and costs from Microsoft. ISG Provider Lens publishes studies to help enterprises navigate the Microsoft ecosystem. Contact us to find out how we can help.
About the author
Louis Pellegrino
Louis joined the ISG team in early 2014 after nearly 20 years with Microsoft Corporation. Louis has compiled a track record of Enterprise client success underpinned by customer focus, strategic thinking, organizational agility, problem-solving acumen and impactful knowledge transfer which has established his reputation as a Microsoft licensing expert.
During his time with Microsoft, Louis worked in both the Consulting Service Group as a Practice Manager and in the Worldwide Licensing and Pricing Group as a Director responsible for designing and negotiating Global Volume Licensing relationships. As a highly effective and influential communicator/negotiator, Louis has delivered consistent business results across both revenue and quality of service performance targets.
