Microsoft provides more details on Office 2013 pricing and licensing changes

Microsoft provides more details on Office 2013 pricing and licensing changes

Summary: Microsoft is claiming some users could see price decreases with the new Office 2013 servers due to consolidation in SKUs. But your mileage may vary.

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Last week -- just ahead of the December 1 date when Microsoft added its new Office 2013 servers to its volume-licensing price lists -- the Softies were tight-lipped about exactly what customers should expect. (Luckily, some of their reseller partners were not as reticent to talk.)

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Resellers said volume licensees should expect substantial price increases for several of Microsoft's new Office 2013 servers. They also said Microsoft was consolidating its licenses, replacing multiple SKUs with a single option (in the case of SharePoint and Lync, specifically). Microsoft officials declined to comment last week about the coming changes.

On December 3, now that the volume-price lists are public, Microsoft execs were a bit more willing to talk about the licensing and pricing changes for the on-premises servers that have gone into effect.

Here's a statement with which a Microsoft spokesperson provided me when I asked today for more on this:

"Microsoft recently notified partners about licensing simplification and pricing changes coming with the next release of Office so they can inform customers about their options prior to license purchase or renewal. These price changes do not necessitate an automatic price increase and some customers may see an overall price reduction.

"As with any new release of Office, we evaluate how customers are using and licensing our products. Based on customer feedback, we simplified licensing options for businesses that want to continue to maintain their own environment. Customers now have consolidated access to features which provides increased flexibility as their deployment needs change.

"For example:

  • Microsoft Lync — We replaced the two separate Lync Server 2010 Standard Edition and the Lync Server 2010 Enterprise Edition with a single license. With Lync Server 2013, any organization purchasing or renewing Lync Server gets all of the features previously reserved for the Enterprise Edition license, including enhanced scalability, redundancy and resiliency, in addition to 2013 enhancements such as Lync Web App for remote users to easily join web meetings, multi-party video, and H.264 SVC support to enable HD video conferencing across a range of devices. Lync Server 2013 External Connector rights are also now included for all workloads so customers can connect more easily and richly with external contacts.
  • Microsoft SharePoint — The array of previous server licenses have been combined into the new SharePoint Server license. We increased the value of the SharePoint Server license by including SharePoint for Internet (and Extranet) Sites, Enterprise Search (FAST), and SkyDrive Pro, the new document storage service for SharePoint, in the main unified server license. Previously, access to those technologies required separate or different licenses.
  • Microsoft Exchange — The world's leading enterprise email system, will get some fantastic updates including a simplified building block architecture, built-in anti-malware, and an enhanced Outlook Web App. We will also be retiring the separate external connector licensing, but there is no change to price."

Microsoft officials still are not confirming prices leaked earlier this year for Office Standard 2013 ($369) and Office Professional Plus 2013 ($499).

I'm curious if customers have found Microsoft's claim that those buying the Office 2013 servers won't be faced with automatic price increase and "some customers may see an overall price reduction." Some resellers had been warning customers without Software Assurance licenses they might see substantial price hikes for the on-premises versions of Microsoft's new wares. Microsoft officials seem to be saying server license consolidation potentially could save some customers money. Anyone found that to be true in their calculations?

General availability of the new Office through retail and online channels is still on tap for the first quarter of 2013, Microsoft execs reiterated today. I am betting that means January.

 

Topics: Enterprise Software, Collaboration, Microsoft, Unified Comms

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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Talkback

13 comments
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  • Notice the timing of this announcement.

    It's interesting that all this is announced right after the CAL price increase.
    techvet
  • It's a little nuts, but...

    It's crazy that their server pricing is simplifying, and overall IS cheaper than the piecemeal pricing before, BUT their CAL (Client Access License) pricing is definitely much higher. I've been discussing with my licensing vendor for the past month, and trying to buy just one or two licenses here and there to get locked into the old pricing (which yes, works just fine as long as you include Software Assurance).
    GoodThings2Life
    • Software Assurance is defintely the way to go

      And I am glad they have simplified licensing on the server end. Just a few more simplifications and then maybe Dell can actually understand what they are selling in the licensing department, or I can understand enough to only buy what we need.
      grayknight
  • End Game

    Not atypical for a formerly mind-share leading company trying to grow revenue. Milk what you got for all it's worth.
    curph
  • Adding the cost up of the following three items

    Surface Pro 128 GB with a Touch Cover and a license for Office Professional Plus and one needs to pay roughly one thousand, six hundred and eighteen US dollars plus tax.

    Ouch!
    kenosha77a
    • OR...

      You could figure out what they are trying to do by looking at what Office 365 is doing. $99 per year with installs on up to 5 devices (no specification of what hardware they would have to be put on).

      I *think* I get it, and you are factoring in a cost that is not intended for the end user.
      thoiness
  • Waiting, not so patiently for Office 2013

    With Windows 8 on nearly all my machines and trials/previews of Office 2013, I just wish they'd let us purchase Office now.
    grayknight
  • Wait, you guys really

    pay for a word processor?
    Tony Burzio
  • MS brings you money saving techology at the same old prices

    Given $1300 for software plus $300 for a Chrome Book, I wonder if many CIOs keep their title if they can't save $1300/2 by planning to migrate away from MS.
    jnffarrell
  • Many customers will see automatic price increases

    I don't see many price decreases here, but there are some. Prices I'm quoting are based on the Dec. 1 Open price list, which is the basic list from which other discounts are calculated
    The new, single Lync Server is $3,646, which means the cheapest predecessor, Lync Standard ($708) goes up 515%. On the other hand, the most expensive predecessor, Lync Enterprise ($4,051) goes down 10%.
    For most people SharePoint goes up, by 38%, but a few people may have purchased the very expensive SharePoint For Internet sites ($11,793 Standard, $41,392 Enterprise), so their prices will go down now that MS has built Internet access rights into the basic SharePoint server. They won't be getting any money back for those expensive licenses, however.
    Note that customers who have purchased servers through Enterprise Agreements will automatically be billed for higher Software Assurance payments in renewal, even if they don't deploy the new product. For example, if you licensed Lync Standard 2010 and don't plan to upgrade it to 2013 any time soon, your SA payments will still go from go from $177 a year to $912 a year. (In other words, your annual maintenance price will be higher than you paid for the whole license originally.) MS is going to charge SA on the new, higher-priced product, on the assumption that since you have rights to the new one you should pay its maintenance cost, even if you're not using it.
    Probably most Enterprise Agreement customers will see their total server costs go higher when they renew. My advice is to not renew SA on these servers automatically in the EA. Since you're already entitled to the 2013 product, your SA upgrade rights are actually for the 2016 product, which you probably won't deploy until 2018, at the earliest.
    Also, Office 2013 is already on the price list, so it is available to volume customers now. There are no changes in Office prices for volume customers. Standard is unchanged at $373, and Pro Plus at $508.

    Paul DeGroot
    Principal Consultant
    Pica Communications
    Al S Cook-4ec56
    • Of Course

      Of course they are going to crank their On Prem software pricing. They want everyone to get hooked on their cloud. It's no surprise at all. Any takers on a bet that their Cloud pricing goes up in 2013?
      FarVision
      • Actually...

        Microsoft reduced cloud pricing by 20% across the board last year, and the more people that purchase Office 365, the lower Microsoft's average cost is for the solution. Prices are more than likely going to drop than they are to rise.
        CharlesDrengberg
  • Too many changes

    Microsoft has introduced many changes lately: per core licensing for SQL, per processor for Windows Server, consolidation of product SKUs, companion license, user CAL price increase, and requirement of SA for license mobility within a server farm just to name a few.

    I am sure many customers are overwhelmed with so many changes that just keeping track and applying these to their best practices, product catalog and SAM initiatives are a real challenge.
    j.senior