June is the end of the Microsoft fiscal year, which makes it an ideal time to negotiate.
If you’re in the middle of a Microsoft licensing purchase or renewal you will probably have noticed that you’re being pushed really hard to complete it…now! In fact, you might well be told that Friday, June 18th is the deadline.
The reason for this, as explained in last week’s blog, is that June marks the end of the fiscal year for Microsoft. So that last ditch effort to close as many deals as possible is on at Microsoft. Since Microsoft knows that things sometimes go wrong at time of execution of a purchase or in signing an agreement they will typically tell you that Friday, June 18th is the last day for your submittal.
Actually, there’s still a little while to go. Since things do go wrong, I do encourage you to finish by Friday, June 25th but in today’s electronic age you really can push it to the week of the 28th (although your Microsoft representative might start getting more and more tense, LOL!).
Here are some tips to think about during this final fiscal push of the year:
1. It never hurts to ask! Tell them what it is you want in order to make it happen before June 30th and then sit back and see how creative they can become.
2. Know what it’s worth to you. While it’s OK to ask Microsoft what they can do to help you make a deal more viable for your business, it’s also important to have a clear idea of what you are expecting from them. Anyone who has been involved in negotiations for any time knows that the first deal on the table is rarely the best. Listen to their proposal and then let them know what is acceptable to you. Give them a clear goal to work towards so your representative can let their management team know what your needs are for meeting their deadline.
3. Think of the value as it relates to Microsoft. The offer to you will be based upon the resulting value to Microsoft. If you’re just purchasing some software licenses to cover what you’ve implemented in the last month and not buying maintenance or investing in new technology, your discount is going to be considerably smaller than if you are making a move that Microsoft will view as improving your strategic, long-term relationship.
4. Play the game. Yes, there is a game involved. Your Microsoft representative has limits on what he/she can offer without gaining management approval. Each level of management adds another layer of flexibility but you aren’t going to get to those levels if you don’t agree to meet and discuss your needs and what Microsoft needs to do for your business. Leverage your own management team to drive these escalations; Microsoft wants to know they are forging a relationship in the C-Suite.
5. Get creative. Microsoft’s negotiations typically involve a combination of pricing discounts and subsidy funding to be spent with one of their partners. Give them room to maneuver. If you’re planning an upgrade to SharePoint 2010 and Office 2010 then “Proof of Concept” funding, training vouchers, implementation funding and licensing discounts are all probably of value to you. Some of these are easy for Microsoft to offer, others are a lot harder…help them give you a great deal.
6. Re-think your July and August purchase plans. If you know you have a sizeable purchase coming up, consider if you can execute on that this month. If so, get a quote and start negotiating. Let them know there is no driver for you to complete it this month other than discounts from Microsoft.
7. Get your reseller to help. Working with your reseller and having them as your advocate (or another Microsoft partner) can speed the process and make it easier on all sides. Just remember, Microsoft is probably one of their largest clients so realize there is a limit to how hard they will push but they can definitely get the negotiations started for you!
One final thing to remember, your Microsoft representative is most likely expecting some form of bonus based upon their sales and the sales of their region. Don’t make the mistake of forgetting their very personal investment in the purchase you have on the table!
