2Data's Purpose is Clear
Sometimes answering the ‘why’ question in business, beyond the drive for commercial success, can be challenging.?When we started 2Data I’m glad to say this was not the case.?Ian and I had both worked together at Insight Enterprises, delivering services to some of the largest companies in the world and through this, and other experiences including working together on Cloud Optics, we’ve built up a broad and deep experience in cloud licensing and optimization.?Insight Enterprises became the largest licence reseller in the world and we grew Cloud Optics very rapidly before selling to The Carlyle Group in 2019. As such we believe, as a team, it’s fair to say we are second-to-none in terms of our industry knowledge and experience. Our 'why' stems in part from this experience.
According to the Department for Business, Energy and Industrial Strategy (BEIS) there are circa 5.6 million SME’s in the UK employing 16.3 million people and generating more than half of the UK’s private sector turnover.?Since 2010 the growth in small and medium size businesses has also been strong as the country continues with what clearly seems a more entrepreneurial drive.
Growth in the number of?UK?private sector businesses by size band, 2000 to 2021 (index: base year = 2000)
The SME business community is therefore the backbone of the UK (indeed any nation’s) economy, contributing significant tax revenue and providing employment for roughly 60% more people than larger organisations.
Looking at this, and thinking about our experience developed over years of working with larger organisations that consider their cloud computing and licensing optimization very carefully, we realized that there was real purpose in the services and cost savings 2Data can deliver to this space, especially amongst the 36,000 or so organisations with between 50-500 employees.
The timing could not be more appropriate either.?This year Microsoft has announced significant changes to its pricing which, without careful guidance, could end up costing businesses of all sizes significantly more.?Given Microsoft dominates share of the desktop licence market at 67% share and holds a strong and growing second place in cloud services with just over 20% of global revenues (see figure below) the impact will be broad.
Share of Worldwide Cloud Service Revenues
So what is the change exactly?
Microsoft introduced a new, simplified subscription purchasing process called?New Commerce Experience (NCE)?in preview back in 2019. The focus was to streamline acquisition options and provide greater flexibility to organizations. Over the past two years, both Azure subscriptions and perpetual licensing have been addressed. In its latest update, the New Commerce Experience has been expanded to include Microsoft 365, Dynamics 365, Power Platform and Windows 365.
This model will initially incentivize annual subscriptions over monthly ones. Microsoft subscriptions have been loosely based on annual agreements, but they haven’t really been enforced and customers could add or remove licenses in monthly intervals in what was effectively a pay-as-you-go model.
Now, these monthly changes will come at a higher cost, a 20% difference over the annual price which started in July of this year. ?In some instances, the monthly option may still make sense. However, for regular employers the annual license offers a significant saving, but calculating the right level of service and understanding what’s really needed is key otherwise the new annual agreements simply won’t be optimised. ?
On balance Microsoft has not had a major pricing update on Microsoft 365 in 10 years. In that same time, they have put a lot of development into the platform by adding high-value apps like Teams, Power BI and OneDrive, along with security features and automation capabilities.
With NCE, they are adding robust options for businesses within the same product set, and more avenues to use different stock-keeping-unit’s throughout the year.
While the price is going up, there are promotions that can help keep your cost at a lower price point per year, especially if you take advantage of the annual licenses.
领英推荐
The major changes that NCE brings are around the term commitments.?With NCE, organisations have to choose which term commitments you require.
Monthly:?This provides flexibility to increase and decrease the number of licenses every month but, as highlighted, comes with the new 20% premium attached for the flexibility.
Annual: This commits an organisation to a set number of licenses for an annual term at a more attractive rate, however it also sets a strict baseline for the term so if staff numbers drop below the baseline there will be wastage.
Multi-Year: As above but a minimum 3-year commitment.
There’s also quite a bit of devil-in-the detail as you might expect.?From term changes to auto-renewal of online services, to the removal of GiThub Learning Lab in September 2022 to two updates in July to Dynamics 365 there’s a fair bit for an organisation to consider.
Ultimately, this new model is equipped to offer your organisation greater choice and flexibility whilst saving you money for longer-term commitments. Even so, if this all sounds somewhat complicated… it’s because it sort of is.
As mentioned above, these changes from one of the largest providers highlight that the space can be a bit of jungle for businesses of all shapes and sizes - but especially for SMB’s that may not have the in-house expertise or experience required to navigate and negotiate optimally.?
To us this change also emphatically highlights why 2Data is here, underpinning our purpose with great clarity.?
The definition of the term ‘purpose’ is twofold according to the Oxford English Dictionary:
“the intention, aim or function of something; the thing that something is supposed to achieve”
It can also be defined as “ meaning that is important and valuable to you” as well as “a sense of resolve and determination.”
At 2Data all three of these definitions apply as we aim to bring value and clarity to our clients in a space that’s been important to us for decades, and we are most certainly determined to use our expertise to the greatest benefit of our clients.
Get in touch to find out how we can save you time and money through optimising your licensing and cloud services.
Harmeet Assi, Founder, 2Data