Microsoft removed discount tiers for M365, creating a hidden tax on renewals. Organizations can now buy up to a higher tier for a 7% discount across all products, but benchmarking against peers gets harder when Microsoft controls the discount story.
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It really is what I refer to as a hidden tax within your renewal. Right. Because we're losing those tiers means you lose leverage. Right. So we have clients, for instance, that are close to being at, you know, let's say they're a level B customer, but they're close to C. So they might buy up to a level C to get that incremental 7% discount across the board on all their products, including their Windows and SQL servers. I didn't mention that Your on premise, your perpetual licenses are not being impacted in this announcement. This is just for M365 subscriptions. So your things that are purchased through your O365 tenant. Right. It's going to make things like benchmarking harder because Microsoft now controls the narrative. Right. So it's going to be very difficult to understand the benchmarking. So as they make this change, we have a lot of organizations that come to us and say, you know, how's our purchase look against our peers? It's going to be very difficult to do this as they go because it's new ground. Like we said, we don't know whether Microsoft, I don't know whether Microsoft is going to push the amount of discount that they gave. So let's just say they're top. You know, you could have got 20% at a level D customer. They're going to push that so that Maybe you get 35% now to normalize pricing. I highly doubt it, but, you know, we don't know yet.