Alexander: We're talking about Microsoft negotiations today.
Daryl: I really love this quote from the book by Sun Tzu, "The Art of War". If you haven't read this book, it's a must. I'm gonna quote one of my favorite passes. "Now, the general who wins a battle makes many calculations in his temple or the battle is fault. The general who loses the battle makes but few calculations beforehand. Thus do many calculations lead to victory and few calculations lead to defeat."
Now, one would ask, "We not at war, we're negotiating". But there are key similarities when you prepare for war or for battle, and when you prepare for negotiation. And I think this is the essence of any negotiation, but Microsoft, especially because of the complexity of Microsoft, you need to be prepared. If you enter a negotiation with Microsoft and you haven't done your background checks, you haven't got a game plan that we'll talk about in a second, you don't know what your BATNA is, your best alternative to a negotiation, you don't know who you're negotiating with, you'll lose the battle. It's correct for any negotiation, but even more for Microsoft because of the size of Microsoft and because of the complexity of licensing and the size of the deals.
If you don't remember anything from today, I want you to remember to prepare and take the time, not a month before, not two months before, but 12 months - ideal, more - fantastic, less - you're pushing it. Because of the amount of preparation that you actually need. So let's get into now the details of what it means to prepare for Microsoft, what to expect from Microsoft, and how to win the game.
Alex asked me, what kind of game plan do you think my audience should actually have in play? And we had a very interesting conversation about going through a internal preparation checklist of understanding how many licenses you have, looking at your inventory. Everything is that's absolutely true. If you don't know what you have, what's installed, what's being used, what you've purchased, and where that is, you're gonna miss out on your game plan. But a game plan is much more than just your inventory. A game plan is, "What is your strategy? What is unique to your organization that you are bringing to the table in this upcoming negotiation?"
Every negotiation is different. It depends on which country you are in. If you are in the US, which region are you in? What's going on with that account team, that Microsoft account team, at that exact time, are they meeting their quota? What do you need to do in order to leverage that?
What is specific to your business that you can bring to the table and leverage? Are you moving to Azure? Are you moving to aws? Are you a Google player as well? There's something unique that you have to think about. So a game plan starts at the bottom level of what you have in your organization, what licenses are installed. But then you start building blocks on top of it, and that is what's unique to your business? What are your business plans? What's your industry looking like? And then you start building on top of that. And until you know exactly how you want to execute, so you know exactly what that looks like, what you need, and then you need an execution plan.
Alexander: Tell me if I'm a bit preliminary, when somebody is putting together this game plan, would you suggest having almost a role play, large group discussions?
And thank you, by the way for mentioning inventory. I wanted to emphasize to everybody that every time when I was a part of Microsoft negotiations and I'm a big fan of being prepared.
If there was no clear vision of the Inventory Microsoft sniff that out immediately.
Daryl: Yeah.
Alexander: They can see when you're not in control. Preparation is very important. It's a part of the big plan of the game plan, but it's an essential part, so you shouldn't really skip that.
Daryl: BATNA, I dunno how many people have heard about the word BATNA. If you are professional negotiator, or you've been to a negotiation course, I'm sure that you've heard about it or read about it.
But for those of you that haven't yet had that opportunity, BATNA is the best alternative to a negotiated agreement. When you start formulating your plan, your business plan, your negotiation plan, one of the most critical components of that, especially with Microsoft, is what are your alternatives?
What happens if you don't reach an agreement? What happens if you don't meet your goals that you have set out to reach within the negotiation framework? Lemme just give you an example. If you wanna move to E5, Microsoft E5. Why? Because there's one security component, maybe EDR or another component that you really want, but there's a price that has to be met, otherwise it's going to be out of your budget scope. So what is your alternative? What's your best alternative if you don't reach that price mark that you need for E5, for EDR? Have you looked at alternative products? Have you looked at any competitive companies? Have you started to do something in that direction?
A BATNA could be, what is your alternative for Microsoft EDR? And you need to prepare. You can bring that as leverage to the negotiation table. It gives you the confidence many times that you've actually got an alternative. Because if you are negotiating, especially with Microsoft where it looks like that the game's already been set and you don't have that confidence that you have an alternative, you'll negotiate like you don't have an alternative. Microsoft will understand that. They'll feel that. You need to sit down and understand what your BATNA is. If it's instead of moving a certain workload, your SAP workload to Azure, make sure you've got another game plan of moving SAP maybe to AWS.
Maybe you wanna start a pilot of AWS within your environment prior to engaging Microsoft in a negotiation. So you've got an alternative for that very specific workload. Now that's very powerful. Without that, you are negotiating with a handicap.
You've got your BATNA and you've put together a game plan, where you wanna go, what are your objectives, how you gonna play the game. Remember when you are negotiating with Microsoft, sometimes it looks like you are negotiating with this giant, huge corporation that is impossible to actually do anything more than just ask for a discount or to receive some benefits.
And even that, at times, you feel that I can't, they're so big. They've set the rules of the game. But you need to keep in mind that when you're negotiating with Microsoft behind that big corporation, if you unmask them, there are people, there are individuals. There's an account manager. She might be new to the company. She might only have a handful of accounts that she's managing.
And if that individual, that account manager doesn't meet her specific goals at the end of the quarter, meaning if she doesn't get your account to sign on time, she's gonna miss a quota. That means, doesn't matter how big Microsoft is, for that individual, you are everything. You, the customer, mean everything.
She or he will need to meet that target by providing you with the best service and best agreement they can. So it's all about unmasking. What are the needs behind it, who you are dealing with, what motivates them. You need to do research you need to understand who your account manager is, who your technical reference or technical account manager is as well. You need to understand who manages the team, who is the licensing manager who sits at the business desk. You need to get a good understanding of almost I'll say the ecosystem.
And if you understand the ecosystem, you can start playing around with it. You can maneuver it. It's all about unmasking the giant. Don't be afraid of Microsoft. Don't be afraid of any large vendor. If you start getting granular and you start discussing details with very specific people, you'll feel more comfortable. You can put your boss at ease because there's sometimes a lot of stress there. I think corporates that are bigger than Microsoft in the marketplace, but when somebody within their team speaks to Microsoft, sorry, their knees shake. Why? Because it's Microsoft.
But at the end of the day, it's just people
Alexander: Can I ask you about it, Daryl? There's an impression from almost every customer of Microsoft, except for the big ones who have already been in these battles and they know they can win.
There's an impression you can't really change anything in the Microsoft agreement. You can't negotiate anything. You shouldn't even try. With Oracle, people do try. Oracle is very expensive and people do try and they get some concessions. Sometimes Oracle would in return sneak in something into their agreement.
Oracle is very flexible around agreements. Microsoft never really changed the actual text of the contract. What's your word of advice? Obviously you're saying don't be afraid. How small you must be to absolutely be unable to even start negotiating with Microsoft.
So where's that threshold where you can comfortably go back to Microsoft and say, you know what, dear Microsoft, I'm not getting value for money. Shall we discuss this?
Daryl: I'm gonna say, it depends. And I'll tell you why it depends. You can be an organization of 500 users, a small organization, but your organization sits in Cyprus or in Greece.
For Microsoft Greece or Cyprus 500 user organization is a pretty, it's not a big organization, but it's an important organization. So you've got negotiation leverage. If you're a 500 user organization and you sit in the United States, for example, you're not gonna negotiate like you're in Greece.
You are gonna have to engage your LSP or your reseller depending on who you work with. And you're gonna find specific leverage points to use on your reseller or on your LSP, so they can go back to Microsoft and negotiate or bring you some kind of benefit on your behalf. It might not be changes in the actual terms and conditions of the agreement, the Ts and Cs, the legal stuff.
It can be done, but you need to be a substantially large organization than 500 users. It can be done, you can negotiate terms and conditions, you can change legal terms. Again, you need to be big enough. Don't be afraid. If you're big enough, 15,000 users and above, I've seen that many times. You can negotiate terms and conditions.
You need to set the stage for that, find the right leverage point. You need to understand your position in the market, your position in relation to your country, to your region, to your vertical. So there are a lot of variants that you need to look at. It's not one size fits all.
Alexander: There are people, obviously Microsoft who have their own quotes and targets, and I was told for instance that if an account manager doesn't meet that targets, they could be even fired from Microsoft.
It's a brutal, pretty brutal culture. Although it's a friendly company, but if you're not meeting your targets, why would we keep you? That's what I was told. I've never worked for Microsoft. What I notice is when I started working with larger accounts is that the relationship with those account managers never stops. They're always on site. There are some technical account managers talking to technical teams about deploying stuff to Azure or helping them with virtualization or describing them the benefits of the new security package or passwordless authentication. And the account manager is always around. How do you manage that, that you still maintain that friendly relationship because you wanna maintain that small talk. You wanna know what they are about as human beings and what drives them. Maybe they have a vacation plan that you understand they might need a bonus by that time. But at the same time, how do you not disclose too much to them? Because the more they know, it depends, but you are not in a good position, are you? If they know too much.
Daryl: Microsoft are really professionals when it comes to getting to know your organization. Usually they have multiple sources of information coming in from various people, either within their partner ecosystem or within the account team that are working within the organization.
And the account manager, don't be fooled. They are collecting their data. They have weekly calls or monthly calls with the entire team, and they know exactly what you've deployed, what you're planning to deploy, which competitive technologies you're looking at, and they have a profile on you, and they'll use that profile when they negotiate.
You touched on a very good point. Microsoft as an employer is a very aggressive employer. If you are an account manager, you might lose your job if you don't meet your quota or you don't sign that contract on time. I've seen that when I was at Microsoft. I remember as a young account manager and then as an licensing executive, we were totally afraid.
We were stressed out coming end of quarter or end of the year if we weren't meeting our quota because we knew somebody was gonna go home. Always. Somebody goes home. They have a policy where they refresh every single year a certain percentage of the employees. So somebody's gonna go home. If you understand as we spoke about unmasking the giant, if you understand who you're dealing with and what their specific situation is, that's leveraging in the negotiation. That's money in your pocket. That's changing the table around from them collecting data on you, understanding your environment to you understanding what's motivating and what's moving that account.
Alexander: Thank you.
Daryl: When we were discussing, Alex and I, and preparing for this live, Alex asked me, what are the top six mistakes that you've seen negotiating with Microsoft? And I can tell you that it was very difficult to bring it down to six cause I've seen so many.
But let me share with you six mistakes that I see and I still see them today.
One, is being intimidated by deadlines. Microsoft is famous for putting down the deadline. Your contract is going to elapse, and you're gonna lose all your software assurance benefits. You've got various workloads running on Azure. You're going to lose that. You're going to be in a situation of no service, denial of service. All kinds of bad things are gonna happen to you. You're gonna lose your discounts.
I've been around Microsoft for 20 years, I've never seen even once - hundreds of deals, if not more - that if a deadline passes that Microsoft closes on previous promises or services have been shut down.
I can actually tell you that one of the best tricks in the book is to go past your deadline, you have to manage it correctly. You have to be strong, you have to be prepared. But if it's an aggressive negotiation, I'm not afraid to go past the deadline, Because the pressure is immense. Microsoft account reps have, in addition to financial or monetary commitments or monetary goals, they have service goals and quality goals.
And one of those quality goals is on-time renewal. So if they don't renew on time, they will be penalized with their bonus. Remember that. Don't be intimidated by deadlines.
Alexander: What about the removal of the 30 day grace period? How does that work together with what you just said?
Daryl: For the renewal term? You can renew later, Microsoft says you can actually extend your agreement for a year or you can have a late renewal. But there's like a caveat that you'll lose your discounting that if you go overtime this and this will happen.
It's not that you've got 30 day grace. It's not an automatic grace that everything's okay. It comes with a threat. Don't be intimidated by that threat. And again, it depends if you're on a CSP agreement or you're on an Enterprise Agreement or an old Select agreement, there are so varieties out there mixes of a agreements.
Each one has different terms and conditions. I've seen organizations or my customers don't know what's on the contract. That keeps amazing me. You have to read your contract before you negotiate. Most organizations just look at their MLS, their licensing statement, and that's it. They don't understand exactly what their terms and conditions are. It amazes me.
Take the time and read the contract. Don't get the legal to read it. You read it. You'll learn some amazing tricks or opportunities that the agreement provides you with.
Going to number two, letting Microsoft go directly over your head. Especially in large organizations and complex and tough negotiations, they go over the negotiation team. If they're negotiating with procurement or with IT depending in the organization with how it's set up, almost always they have an executive sponsor within Microsoft, and that executive sponsor will go to somebody with C level title and they will circumvent the negotiation team. You need to be prepared for that. You need to make sure beforehand you know who that sponsor is, and you need to prepare your executive team that's what's gonna happen.
That's part of your game plan. Because if they go over your head, you are losing, you are leaving money on the table. Because they will take you by surprise and they will lead the negotiation.
Alexander: That's a very important point. I'd like to concur here as well. I have seen instances not only with Microsoft especially with nice vendors like Oracle, when the negotiators would go to the top level, take a C level person to a restaurant and if they're not prepared, they would basically sign or agree to sign a deal at that meeting in the restaurant and then come back and say, happily guys, I've just taken a fantastic a brilliant deal, the deal of the century. And once in London, I've seen a person almost having a heart attack because they've spent months and months preparing.
And what the C level person signed was not even close to what they were preparing. It was the opposite. It was actually a very bad deal. Completely not what they wanted to have. I think that's a key suggestion that you just said. You need to prepare your C level people. If that happens, be very vigilant and don't sign anything. What I like about Japanese culture is in the Japanese culture decisions are never made during the meeting. There's always homework. And I think that's the best advice that I would give to any C level person in regards to Microsoft.
Listen, write down, say, okay, we'll come back to you and then go back to your negotiating team and say, this is what we've discussed. You may like it, you may say, I really like this solution. Shall we review it?
Daryl: I think that's really good advice, Alex. So moving on to the third point and that is getting confused of the role of your LSP, your service provider.
The LSP comes through as your partner, as somebody that's on your side. They have your best interests at hand. I just wanna put a slight dent in that conception. They have their own interests and they first of all have Microsoft interests at hand. They are a Microsoft partner.
They have quotas from Microsoft. In the backend. If you're not aware, they are compensated by Microsoft on each deal closed. They are compensated on certain products that go to the agreement as well. So if Microsoft is promoting a specific product, your LSP has an incentive to get that product embedded within your organization, within your agreement.
You don't know if they have a backdoor to Microsoft. I've been in a negotiation where the LSP was brought in to confide with, and they had a back door to Microsoft, the LSP, because they had the same agenda. So, watch out for the LSP. There are techniques you have to turn your LSP back to use that as leverage. One would be today an LSP can sell an Enterprise Agreement, but if you sign a CSP, and that's becoming very commonplace these days, multiple resellers can compete for the same business. So if your LSP feels there's no competition, you can tell LSP, well, I'm considering signing a CSP and I'm considering speaking to a few other resellers, so they don't have that sole relationship with you anymore, and they might just step in and help you in the back end to get a better deal.
So think about how you can leverage your LSP next time.
Getting a late start. We touched on that at the beginning. Don't start a month before. Don't start three months before you've lost already. Try get a minimum of six months headstart because it's so complex and so big. If you can start 12 months beforehand, fantastic.
Microsoft has a very well set out T-18 plan. Their account team is engaging you 18 months before. They're pushing technology. They're getting new stuff in there. They're putting incentive funds within your organization, getting partners to engage you.
That's part of the renewal process. The negotiation has already started 18 months prior to your renewal. You might have not realized it, but they've started, so you start as well.
Letting Microsoft take the lead. In any negotiation, don't let the other side set the tone of the negotiation.
Don't let them sit in the driver's seat and take you where they want to. They'll take you to E5 with all the bells of the new security components. You might not need it, but they'll take you there and they'll set the tone. You set the tone, you tell them what you want. Part of your game plan. What criteria, what do you want from Microsoft? Microsoft, don't send me a proposal for E5, I want E3 plus maybe E1. Don't start off with E5. You won't be able to go back, very difficult.
So don't let them lead. You lead. Your negotiation. Your company. Your project.
Number six. Sending Microsoft raw data. Okay. This seems like really trivial stuff. You might not do it, but I can tell you that maybe somebody in your IT department, some low end, sorry, technical guy has a good relationship with the Microsoft technical account manager with one of the partners and they're just sitting over coffee and they've opened up their Flexera or License Dashboard or Snow, whatever. They've opened up the dashboard and they're looking at Active Directory numbers and the number of deployment of Visio and what's happening with your new estate in SQL Server.
Your data is leaking. That is fueling Microsoft and giving them an advantage. So it's not only about sending in an email your raw data. It's about making sure your technical team is not sharing anything and that the wrong people don't have access to your information because you wanna control the flow of information.
I'm not saying keep secrets and don't have a full disclosure or be under licensed, but if you are cleaning up your environment or you're going through a large project of moving or downsizing or changing your server environment, you don't want Microsoft to know that. You wanna do it slowly. It might take longer than you thought. You don't want to give them any leverage. Look out for leakage of data. It'll put you in a bad situation when that gets out. And it gets out. I've seen it multiple times.
Alexander: Yeah, I've seen data leaking through a low level relationship between a techie from Microsoft and a techie from a company and they would have some really good friendship. You must remember that that person still works for Microsoft and he may be interested in selling you more. And he may be even, not even think about selling you more. He could be very excited about the new technology. And now he's seen, or she's seen that there's an obvious setup to sell you that. You're missing something vital from their point of view.
Therefore, that's gonna be not just pushed towards you. They will know why. And they will know your pain points, potential pain points, not necessarily the pain points you realize. Control your information flow, obviously.
Daryl: So Microsoft culture, this is really overlooked, highly overlooked. I know we've got people on from Europe, US, around the globe. When you're local or you're outside the US, you think you're dealing with Microsoft Belgium or Microsoft South Africa.
And you think this is a South African mentality or it's a Belgium or Netherlands mentality. And you act as you would in your own culture. There are vast differences in culture negotiations. Vast. But you need to remember, Microsoft is an American company managed by Americans. It's American culture.
It's a different set of doing business. From one perspective, it's much more aggressive when it comes to negotiation from pricing perspective, where I've seen Europeans, large organizations mainly discuss legal terms and conditions and usability. Where the Americans are very open and comfortable, aggressively discussing pricing and discount and terms and conditions of payment.
And more and more. So one, you need to understand that you're dealing with an American culture, I can pick an hour just about the differences between cultures in how you deal in the US, how the hierarchy is compared to somebody in Japan, how they conduct the business, how Microsoft works with business desks, where it's accumulated to regional business desks and then goes up to the US business desk if it's needed.
And discounting in the US I can tell you sometimes gets even more aggressive than in Europe depending on the country. Belgium is not the Netherlands. Netherlands is not France is not the uk. Okay?
My US counterparts are much more aggressive when it comes to negotiating discounts. They feel more open than my European counterparts. Many times. Remember that. I would investigate that. There's some incredible information on culture negotiations on the web or you can reach out to me.
I'm happy to help you out on that. But you can learn a lot on how to deal with Microsoft. Even if you're in France, you can talk with somebody in France, but imagine that person has got an American boss. That's who you are actually negotiating with. Keep that in mind.
Alexander: Say you are on Cyprus you talk to the local account manager. So you deal is still approved by the States, isn't it?
Daryl: Many times. It goes up to the regional business desk. It could be in Turkey. It could go to Ireland. They've restructured a bit. So Ireland has a business desk that takes care of Europe. But if it's a really big deal, it'll go all the way to the US. And in Ireland, the people that are managing the business desk sometimes are Americans. Or the rules, the empowerment rules, something that you need to remember - Microsoft has "empowerment" rules, are set up by the corporate, by US corporate.
It's not local, it's corporate America.
Shadow negotiator and empowerment holder. I myself have been a shadow negotiator for 15 years plus. Many times when I work with customers, I work in the backend I call it in the shadows cause nobody really knows I'm there. It works really well. But you must remember that when you're negotiating with Microsoft, there's somebody in the shadows behind your account team that's actually putting the strings. That's why I wanna talk about shadow negotiators.
Shadow negotiators can be consultants on your side, but many times the people that you're negotiating with aren't actually the decision makers. There's somebody on the Microsoft team that is actually the shadow negotiator and actually putting the strings and making the decisions. Going back to the beginning of the presentation when I spoke about unmasking the giant, that's part of unmasking the giant.
Empowerment holders are not only decision makers because Microsoft has a very well set out empowerment list. Each one has a different set of concessions that specific people in the organization can actually provide.
You can look at them as decision makers, but they're not usually decision makers, sometimes they just sign on the block. So Microsoft's team has to provide a really good business case. You need to help the Microsoft team with that business case so they can articulate and be your agents, your ambassadors within the organization to get to those empowerment holders if you can't and represent your best interests.
Put yourself in their shoes This is an exercise that I recommend to do all the time. I recommend doing it at home with your spouse as well. Imagine that you are an account manager and you've got a quota. You might lose your job. You might not get that bonus that you want.
Huge, immense pressure. So put yourself in their shoes, try and envision yourself selling to yourself. That will set a psychological framing of what they are thinking and how they are thinking, and how they are approaching the negotiation. It's a bit of a mind game that you can play with yourself.
Take your notepad and write down 10 things that you think they are thinking about, your account team's thinking about when they're planning your negotiation.
Very, very powerful.
Imagine that you've actually negotiated this deal and there promises have been made. Some of them have been verbal, some of them have been in emails, others are in the actual proposal. And then Microsoft comes back and provides you with their vanilla agreement with the pricing.
And they say, sign here. And you ask them, okay, where are all those great benefits that you promised? Incentive funds, migration assistance, special terms and conditions on audit. They promised you they won't audit you in the next 12 months. "We'll take care of you. Don't worry. Nobody's gonna audit you." But it's not in the contract. If it's not in the contract, it doesn't exist. No side letters, no verbal commitments. If it's not in the contract, it doesn't exist. I've seen issues with, for example, future pricing. So you wanna lock in a future price for a product that you know that you're going to be heavily rolling out or maybe new technology that you wanna purchase at a latest stage. Additional SQL server licenses. And you got a 25% discount on SQL Server specifically in your agreement. And you asked your account team, please make sure that I have that same discount when I true-up in the future. "Not a problem. I'll take care of you. You'll get that 25% discount."
That person won't be there potentially maybe in a year's time. Nobody gives 25% upfront on TrueUp. I can tell you that. It's never exactly the same as the discount that you receive when you sign up for software assurance. And that person hasn't gone through business desk to get approval. If they promise you a TrueUp discount on future purchases, make sure it's in your agreement.
Make sure it's in your Customer Price Sheet or in the contract. Not verbal, not in the email. Keep that in mind. Get everything in writing. Not in writing? Doesn't exist.
Alexander: I would also suggest, because that happens post negotiation. When you get all your agreement paperwork, keep every single paper because almost every single paper except for the framework agreements is vital. There may be some things, notes, especially if those are bespoke terms, that will be in a CTM addendum. Never lose them. You need them all the time. You need them to conduct internal reviews. You need them in case you have an audit, you need to show them to the auditors because they won't have the data. They might go back to Microsoft and ask Microsoft to provide them, but they will be expecting you to have everything yourselves.
Whatever you agree during the negotiation especially, get it in writing. But also keep that then. When you get in writing, keep that.
Daryl: How many times have we seen Alex from your experience when you're coming to a renewal and you ask the customer, please provide me with your documentation from your previous agreement.
And they come back and they say, I've got no idea where my contract is.
Alexander: Every single time. Same story.
Daryl: That's amazing because you don't know what's in the contract, you dunno what your terms and conditions are. If there have been any amendments, you haven't got a clue. It's so basic. What I've seen is that when a contract is signed, it goes into a file, virtual file and all the benefits that are within the contract are not even realized.
For example, for classroom rights, I dunno how many people are even aware that there are free classroom licenses for your educational facility within your organization. How many people know there are 20 licenses? 20 licenses is $20,000, $30,000, $40,000. There are server licenses, there's Project there's Visio that can be used. Nobody actually knows that. And they go and they pay another $20,000. Let's just give Microsoft money. It's there in the contract. And there are a few more things people don't read the contract and then they don't roll out the benefits they actually have. And that's just a very small example. Please read the contracts and make sure you roll out your benefits that you actually receive.
Alexander: When you're not using those benefits and Microsoft are talking to you, they know all about your infrastructure. They know you're not using those benefits. It's another checkbox: "the customer is not using, not utilizing all the benefits of the Enterprise Agreement. Maybe they haven't read it. If they haven't read it, therefore they're not prepared for the negotiation."
You can basically tell anything and it'll be taken at face value. Just a recent example, by the way, about not reading your own agreements. A customer had a very good concession put in the Enterprise Agreement, something fantastic, something substantial, with a caveat Microsoft also managed to put there. They fixed the Product Terms to a certain date.
Daryl: Mm.
Alexander: Did they know that they're gonna change the rules? Did they not know that they're gonna change the rules? But after that agreement was signed, Microsoft allowed third passive instances of SQL Server in Azure.
And the customer, when they read the Product Terms, they thought, okay, fine, we can now deploy free instances in Azure, but because their Product Terms was in writing fixed to that date, and they never read the CTM they remembered the good bits, but never looked at the bad bits.
In the end, they became non-compliant because of that. And they had to go into very exhaustive midterm negotiation to fix that. You don't want that. Whatever you agree, even before you go to negotiation, reread the contracts. And then when you get all that, reread it again. Make sure whatever was promised to you is in writing, and then keep it in a safe place. I can't stop repeating that. It's very important.
Daryl: And I agree.
Microsoft's last quarter. Their fiscal year ends end of June. If you've got a renewal at hand, I think you understand that this is when things potentially can get ugly. Ugly, because they're under a lot of pressure to close the deal. They don't want it to go into the next year. As we talked about account manager goals and incentives.
But on the other hand, this is an opportunity for you as well. Even if Microsoft is putting a lot of pressure on you, you come to the negotiations calm. You breathe. It's really key. You have to be calm.
Doesn't matter how much pressure Microsoft puts on you, you need to breathe. Cause if you breathe, the pressure goes back onto Microsoft. You've got time, don't stress it out. Meet those goals that you've set out to achieve.
Alexander: Can you actually use that to your advantage? Because one of the things which is in my negotiations playbook is if a customer is in a good position, if they're well prepared, the game plan is fully outlined.
And say their renewal is actually in August. Can they actually agree on an early commitment, early renewal, whatever the name is, to use that as a leverage to get additional discounts because, guys, you want the bonus, you want to close your the financial year? How about you give us a bit of a breathing room here? A bit more, but we'll sign all the papers now. Is it something that you've ever used or you suggest doing? Because you have to be careful with that.
Daryl: So first of all, you're giving away all my secrets, but it's out there, so let's share it.
You're absolutely correct. That is very powerful. It's not only about not being intimidated by deadlines, it's about playing the game in reverse. An early renewal is highly compensated within Microsoft.
So if the account team brings in an early renewal, first of all, they'll be compensated internally, but they will reward you. You can get additional benefits by bringing it in early, so you need to play it carefully. So August, bring it into June. It can work actually really well.
So You need to see where your agreement falls. Or you might have multiple agreements. Or you have gone through a merger and acquisition, I haven't even spoken about mergers, acquisitions, spinoffs, where things get really interesting. Where you have a couple of agreements and they have different end dates.
You have a CSP. You have an Enterprise Agreement. You have old Select licenses that you've got from another company that you've just purchased. We can get into more complexity cause it really doesn't end there. And you wanna consolidate everything. What an opportunity to negotiate! What's the timing for that!
What I personally believe that every negotiation is unique. Every customer case is unique. It might seem generic sometimes. It's not really generic. It's got the same rules of engagement. Do you understand the rules of engagement? That's where the game plan comes in. And understanding the ecosystem and some other things we discussed and the culture.
And if you find that very specific leverage point that's unique to your organization, you bring it to the negotiation table, that's where the difference is gonna happen. That's where the magic is gonna happen in the negotiation. .
I get always questions about discounts. What discounts are out there today? Can you receive discount? We've heard Microsoft isn't providing discounts. You can definitely receive discounts. They haven't gone away. It's tougher than before. It's tougher to negotiate, but using the right leverage point, finding that unique proposition within your organization, you can definitely leverage and receive higher discounts or improve terms and conditions than Microsoft might want you to think. Negotiate. Don't be intimidated, not by Microsoft, not by Oracle, not by SAP, not by any vendor, regardless of the size. You are unique.
Alexander: We have one question from Ruslana which is what do we need to do if Microsoft go through our head and to CEO or CTO directly? What if they did, and you didn't prepare the C level?
Daryl: If they've already done that and you weren't prepared, I would say that you are in a tough situation. They've already circumvented you. You need to engage your CEO and or C level, whatever that is very quickly.
You need to make sure that they go back to Microsoft, and this is about you managing the relationship internally. They go back and they push back and they say, this is not the right time for us to engage with you. We'll be very happy to have this conversation once my team provides me with final approval that most of the points have been agreed upon.
I've got my team, they're doing a fantastic job. I have full confidence in them. Once they finalize it and there's some issues to close, I'll be happy to have this conversation.
So that's what I will do in a case where they've already gone over your head.
Alexander: Thank you, Daryl. Thank you for being with us today.
