Are You Prepared for Microsoft Changes?

Early in 2021, Microsoft rocked the IT world by announcing several sweeping changes to its business model. The massive shift towards remote work caused demand for Microsoft’s cloud-based solutions to skyrocket. In just a single year, Microsoft’s annual worldwide revenue surged from $143B to over $168B.

These Microsoft update changes will affect virtually any organization that uses their products, including locally owned businesses, international enterprises, and everyone in between. Therefore, it is vital that all users are prepared for these upcoming Microsoft policy changes. Otherwise, they might quickly find themselves in a financial bind.

Below, our experts discuss each recent change in detail. We highlight how these changes will impact managed service providers and end-point users. Most importantly, we’ll provide a pragmatic solution that businesses can use to prepare for these changes.

Microsoft Recent Changes

Before an organization can appropriately prepare for Microsoft’s changes, it is important to understand what each of these policy updates is. The Microsoft recent changes are as follows:

Subscription Models for Exchange

In the past, Microsoft has offered its business clients the option to purchase Exchange or SharePoint Server solutions as a perpetual model. However, this will no longer be the case as of late 2021.

New clients will only be able to access licenses for Skype for Business Server, SharePoint Server, and Exchange Server by purchasing a subscription license.

Microsoft announced that they will cease to provide extended support for Exchange Server 2013 on April 4, 2023. They will discontinue extended support for the Enterprise Edition of Exchange Server 2016 on October 14, 2025.

While support will continue for several years for these services, organizations that still have a current licensing contract with either Exchange Server 2013 or Exchange Server 2016 must begin to prepare for these changes.

As a general rule, companies that are currently using these services will need to transition their core server applications from on-site solutions to subscription-based services before Microsoft discontinues its extended support.

Failure to plan accordingly could make it difficult to keep company servers secure and functioning properly.

Stand-Alone Licensing

Power Apps are a valuable asset to businesses across the globe. This user-friendly solution allows clients to build custom apps that are designed to serve the unique needs of their businesses.

Currently, Power Apps use rights are included as part of Dynamics 365 and Office 365 free of charge. Unfortunately, Microsoft has adjusted course and will no longer offer Power Apps as a standard component of Office 365 licensing.

By year’s end, Microsoft will begin to incrementally restrict certain Power Apps entitlements. If customers want to continue to use these solutions, they will have to purchase additional licenses for the Power Apps that they’d like to use.

With this in mind, business owners will need to prepare their budgets accordingly, ensuring that they have adequate funding for the licenses required for their teams.

Year-Long Licensing Terms

Perhaps the most significant Microsoft policy change is a transition from month-to-month licensing to annual terms.

While Microsoft is not eliminating the monthly subscription model for their core suite of applications, they are going to charge as much as 35% more for businesses that choose to use this payment option. This will drive up costs significantly for many businesses.

Microsoft wants to encourage long-term commitments so that it can generate more revenue. This change will prompt businesses to purchase core licensing for the entire year instead of adding licenses as needed each month.

Elimination of the Open Licensing Program

Microsoft’s Open License program has been available to small and medium-sized businesses for years. This plan allows qualifying clients to buy perpetual software licenses at a reduced price.

However, Microsoft is eliminating this program starting on January 1, 2022. Commercial clients will not be able to purchase new licenses through the Open License program, nor will they be able to renew existing services at the reduced rates.

Currently, this update is only slated to impact businesses that have between 100 to 250 employees. But Microsoft could further modify its Open Licensing program in the future in a manner that affects large businesses, as well.

Every company that utilizes the Open Licensing program should start to plan ahead so that they can be fully prepared for any additional changes that may be on the horizon.

What These Microsoft Policy Changes Mean for SMBs

These Microsoft policy changes will impact all small to medium-sized businesses that utilize their products. This remains true whether a company purchases Microsoft services directly or acquires them through a managed service provider (MSP).

Companies that rely on MSP services might be particularly concerned about the new updates to Microsoft’s policies.

Due to Microsoft’s changes to its pricing and licensing models, MSPs may be put in a position in which they are no longer profitable. As a result, they may have to increase their prices or may even need to discontinue service for some clients.

The companies that are going to be affected by these changes must act fast to ensure that they avoid any disruptions to their licensing, as well. They should reevaluate their current licensing strategy to ensure that they are getting the most out of their Microsoft subscriptions.

Finally, providers must rethink the ways that they purchase their licenses and software so that they can get the best pricing possible, while still having the licenses necessary to get mission-critical work done.

Preparing for Microsoft Update Changes with Terminal B

If you want to make sure that your organization is fully prepared for the upcoming Microsoft changes, Terminal B can help. Our Austin, TX, firm specializes in providing customized IT support. We provide faster service, concrete technological improvements, and relevant advice to guide your decision-making processes.

Our IT experts will work with you to evaluate the needs of your business. We will help you tackle these Microsoft policy changes head-on so that you can get the software licenses you need at the best price possible. Contact us today so that we can set your business up for success!