Microsoft to hike by 13 percent its user client-access license prices as of August 1

Microsoft will be raising the price of its User client-access licenses (CALs) for a number of its on-premises server products, including Windows Server, Exchange, SharePoint and System Center, by 13 percent.
Written by Mary Jo Foley, Senior Contributing Editor

As of August 1, Microsoft will raise the prices of a number of its User client-access licenses (CALs) by 13 percent.

The affected CALs are for on-premises, not cloud, products. The prices of Device CALs also won't change, according to the company.

With the User CAL, Microsoft customers buy a CAL for every user who accesses the server to use services such as file storage or printing, regardless of the number of devices they use for that access. With a Device CAL, they purchase a CAL for every device that accesses a server, regardless of the number of users who use that device to access the server.

Microsoft has notified its reseller partners of the coming price hike, and will make the new pricing known publicly when it publishes it price list preview on July 1. A May 28 Microsoft TechNet blog partner blog post entitled "Three reasons why now is a good time to upgrade your customers to Windows Server 2012 R2" made mention of the coming 13 percent price hike for Windows Server on-premises User CALs. Microsoft officials -- who declined to comment on the coming price change when I asked -- have since removed that reference from the blog post.

Microsoft has communicated information about the whats, whens and whys of the coming hike to its partners, however. Here's some of what they've said, according to my contacts.

The User CALs which will get the 13 percent increase are:

  • Core CAL Suite
  • Enterprise CAL Suite
  • Exchange Server Standard and Enterprise CALs
  • Lync Server Standard, Enterprise and Plus CALs
  • Project Server CAL
  • SharePoint Standard and Enterprise CALs
  • System Center Configuration Manager CAL
  • System Center Endpoint Protection CAL
  • System Center Client Management Suite CAL
  • Windows Server CAL
  • Windows RDS and RMS CAL
  • Windows MultiPoint CAL

A number of on-premises products that require CALs, such as SQL Server, Dynamics AX and Dynamics CRM won't be hit by the price hike. And customers who purchase the Enterprise Cloud Suite or Office 365 suites also won't have to pay the extra fee as of August, since per-user licensing is already incorporated into the cost of the suites. Bridge CALs also will be affected, but the amount of impact will be based on factors including which license and currency the customer is using.

Microsoft's official reason why the price hike is a combination of current market conditions, new customer deployment scenarios and increased product value over time.

The last time Microsoft made a change to its CAL pricing was in December 2012, when it increased User CAL pricing by 15 percent. Microsoft originally had told its partners to expect a 15 percent price hike again this year, but has since scaled the number back to 13 based on how it calculates the price differentiation between User CALs and Device CALs.

The original date when the 2015 User CAL price increase was set to take effect was July 1, 2015. That extra month's grace period is likely meant to help with Microsoft's campaign to transition as many customers on Windows Server 2003 -- support for which ends on July 14, 2015 -- to Windows Server 2012 R2.

Directions on Microsoft wrote about the expected User CAL price increase back in February in a note for its members. From that note:

"The upcoming price increase for Per-User licenses will enable Microsoft to monetize the increasing popularity of user-based licensing and potentially drive online services subscriptions. In recent years, both personally owned and corporate-owned tablets and smartphones have proliferated, with today's bring-your-own-device (BYOD) trend accelerating the pace. Despite the price increase, Per-User will likely remain the preferred option under most scenarios, with the main exceptions involving customers with shared devices (such as kiosks), common within manufacturing, retail, and healthcare industries."

Aidan Finn, a technical sales lead for a distributor in Dublin and Microsoft Most Valuable Professional specializing in Hyper-V, noted that it's really user licensing, not the price of a server license, that's the big cost for many customers.

"A trap that people have fallen into is not covering those (user) licenses with Software Assurance," Finn said. "Once you introduce a new version of Windows Server, those CALs need to be upgraded too, and SA protects customers in this regard."

"If someone is stuck on down-level licensing, and they are facing increased costs after August 1st that they cannot afford, then there is an alternative, which is to move to the cloud," he added. "Hosting and leasing can offer per Server licensing instead of per user licensing. Any hosting company can offer this; Azure customers don't need any Windows Server CALs for using Windows Server virtual machines (VM)s in Azure, and they don't need RDS CALs when the use RemoteApp - the license is part of the hourly cost of the service."

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