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Report: Price Hikes Coming with Microsoft Unified Support

• By Kurt Mackie
• December 13, 2017

Microsoft's new Unified Support plan will result in potentially substantial price increases for organizations when it takes effect in about six months, according to a recent report by Gartner Inc.

Co-written by Gartner analysts Michael A. Silver and Dolores Ianni, the report includes information that's not available publicly but is likely of great interest for any organization that relies on Microsoft support for enterprise services like Azure, Dynamics 365 and Office 365.

Unified Support is Microsoft's replacement for its older technical support plans, including Premier Support. Getting public information about the new Unified Support plan is somewhat difficult as searching for it typically defaults to Microsoft's Premier Support documentation, and pricing for Microsoft's support services typically hasn't been a transparent matter. However, Microsoft actually started offering its Unified Support plans as its main support program as of July in Australia, the United States, the United Kingdom, Canada, France, Germany, Mexico and Sweden, as earlier described by Microsoft.

When asked about its plans for implementing Unified Support, a Microsoft spokesperson offered the following clarification about how to buy it and when it will take effect for organizations:

Organizations should contact their Microsoft account teams if they have questions around Unified Support plans. Microsoft has begun gradually transitioning all customers to Microsoft Unified Support beginning in July of 2017 to ensure customers have a smooth transition. By the end of FY19, the Microsoft Unified Support will replace all current Microsoft commercial support offerings and after June of 2018, only Microsoft Unified Support agreements will be available.

Hence, by July of next year, Unified Support likely will be the only Microsoft support offering for organizations worldwide. Unified Support has three plan offerings: Core, Advanced and Performance. Core is the "affordable access to problem resolution" plan. Advanced is "a balance of reactive and preventive support." Performance offers "personalized support with the fastest response times" and a service-level agreement.

The older Premier Support plans typically tasked organizations with tallying up their available "problem resolution" or "reactive" support hours each year before going to Microsoft to get support. With the Unified Support plans, organizations instead have so-called "unlimited hours." These unlimited support hours are offered as part of the Core, Advanced and Performance Unified Support plans, according to Microsoft.

"We're shifting from Premier Support plans with an hourly allocation to one based on three simple but powerful and adaptive levels of support with unlimited hours," the spokesperson affirmed.

Gartner's Estimates
Essentially, Gartner's publication argued that Unified Support lets Microsoft charge for support costs for its Online Services that used to be included in its Premier Support plans at no extra cost. While it's true that organizations no longer have to tally up the support hours under the Unified Support plans, the way the costs are derived are different under Unified Support. Moreover, the costs are based on an organization's overall consumption of Microsoft online services as estimated in the prior year, even if services were cancelled.

Unified Support costs are tied to an organization's Software Assurance payments, as well. Software Assurance typically is thought of as an annual cost guaranteeing software upgrades to the next major release, along with some educational perks. In other words, it's considered to have a separate purpose from getting support. However, the Microsoft spokesperson affirmed that an organization's Software Assurance coverage does affect Unified Support costs:

Customers don't need Software Assurance to buy Unified Support, but they can reduce their total cost by using the support benefits portion of their Software Assurance Benefits as a credit against their contract cost.

Gartner, previewing its article content, offered the following estimates about how Software Assurance payments affect Unified Support costs:

• Organizations paying about 7% of annual SA cost for Premier Support will see a 25% to 30% cost increase for Unified Support; those paying more than 10% of annual SA for Premier Support will see a decrease
• The 6% to 12% Microsoft is charging for support, combined with 25% to 29% SA maintenance, brings Microsoft well above the 18% to 25% industry average for maintenance and support

That's a boiled-down analysis. Gartner is recommending that organizations should begin negotiating the transition costs and discounts to deal with the potential fiscal effects of this shift to Unified Support.

A New Microsoft Tax?
Silver, co-author of the report, emphasized that organizations using Unified Support will get assessed for Software Assurance costs that they initially didn't buy.

"Unified Support costs are based on SA spending AND spending on online services AND money that would be spent on SA for any product which was purchased over the last 5 years without SA!" Silver stated via an e-mail this week.

Silver also offered a clarification about unlimited support. There are two types. And organizations can't use Unified Support for just some services and not others. Unified Support has to be an organizationwide implementation.

"Unlimited reactive support hours (PRS) and unlimited hours for automated, self-service proactive hours are part of all of the offerings," Silver explained. "You can't get one level for cloud and another for your other products -- you buy one level of Unified Support and it covers everything you have."

Silver added that "my clients are commenting that this [new support program] feels like a new Microsoft tax."

The full report, "Microsoft's Unified Support Eliminates Counting Hours, but Some Organizations Will Now Pay for What Had Been Free," breaks down these kinds of nuances.

For its part, Microsoft doesn't exactly agree that Unified Support will increase costs for organizations.

"Support pricing is a good deal compared to what our competitors offer," the Microsoft spokesperson suggested. "For some customers, it might cost more but, most will see little or no increases and they'll get access to a whole range of great new services that integrate support for cloud and on-premise products. In particular, Office 365 customers will not see any change to their support that is provided -- but they will get more and better options under Unified Support."