Microsoft: Yeah, about that 50% post-Christmas customer price hike...

SPLA prices set to soar by up to half again, and this WILL get passed on

Microsoft has cooked up a post-Christmas gift for service providers to prolong their festive cheer – price hikes of up to 50 per cent on volume licensing agreements.

The move has been interpreted by channel partners and hosting firms alike as Microsoft upping the cost for on-premise wares to make its cloudy stuff look more competitive.

According to Microsoft’s European Licensing Solution Partner (LSP) Crayon, the base level price increase on certain products under the Service Provider Licensing Agreement (SPLA) is nine per cent, impacting the Core Infrastructure Server suite.

Windows Server 2012 R2 Datacenter is set to soar by 13 per cent, while the standard edition will go up by a fifth. A whole raft of Dynamics CRM, NAV, GP, AX and SLs licenses will rise by between 14.25 per cent and 50 per cent.

“Microsoft is once again making significant price changes by the 1 of January 2015,” Crayon stated.

The price list for Service Provider Licensing Agreements (SPLA) is subject to change, “there may be slight differences” dependent on variances in regions and currencies.

This is the latest episode in a series of screw-tightening that Microsoft service providers have endured in recent years, and several sources we spoke to claimed they would need to pass the extra costs onto customers.

“No one can afford to absorb this,” said a well-placed service provider.

The reseller margin on SPLA licenses are estimated to be around 12 per cent, with roughly eight per cent paid upfront. Insight and Softcat are the mega SPLA resellers in the UK.

SPLA pricing for Dynamics AX 2012 R3 Enterprise User and Device licenses are set to drop 4.75 per cent, according to Crayon.

Microsoft was mulling over a response to our questions at the time of writing, but channel sources claimed Microsoft is trying to make its online offering look cheaper.

“Lots of companies are still using SPLA, it goes from strength to strength but is effectively a competitor to Microsoft’s cloud products. Microsoft wants ISVs to develop on Azure rather than on their own platforms,” said one.

We’ll update the story if or when Microsoft gets back to us. Updated Microsoft refused to comment. ®