Google Exec, Partners Criticize Microsoft Office 365 Price Hike


Monday’s CRN article reporting that price hikes are in the works for many Microsoft Office 365 enterprise customers was well received by at least one group of readers who the Redmond, Wash-based software giant would rather not please.

The article reporting on the coming price hikes caught the attention of Amit Singh, Google’s enterprise chief, who retweeted it Tuesday on behalf of the Microsoft rival with the question: “Why pay even more money to rent the software you already own?”

Some Google channel partners, a group that can’t claim to be totally unbiased, jumped aboard the Microsoft-bashing wagon.

[Related: Microsoft Brags About Speedy Office 365 Customer Support After Two Days of Cloud Outages]

Doug Shepard, President of Cloud Sherpas’ Google business unit, told CRN, “this is just an extension of what we are seeing in the marketplace as customers come up for renewal on Office 365. The prices go up.”

Shepard compared Microsoft to a predatory lender.

“Similar to the low introductory interest rate, Microsoft is using lower prices to lure customers onto the platform and then they raise prices. Google has been consistent in its pricing for many years, plus has added significant functionality month over month,” he told CRN.

CRN reported that Microsoft is preparing to raise its Office 365 pricing for enterprise volume licensing customers by somewhere in the neighborhood of 15 percent.

The hike will go into effect in August for Enterprise Agreement customers who don’t have an active Software Assurance plan—a 3-year subscription that provides customers with upgrades to the latest versions available of on-premise software.

Microsoft’s director of Office licensing, Lars Johnson, told CRN that the “vast majority” of Microsoft customers are SA customers who won’t be affected, so, in a sense, what the Redmond, Wash-based software giant is really doing is “rewarding” that group.

Allen Falcon, founder of Google partner Cumulus Global, was surprised Microsoft didn’t adjust the timing of its announcement to avoid an inopportune moment.

“Microsoft's price increase, which they chose not to delay following a week with two huge, major, embarrassing outages, is more than a bit surprising,” Falcon told CRN, referring to Microsoft’s Lync server going down for eight hours on June 23, followed the next day by the Exchange server going down for six hours.

“I find it interesting that Microsoft is ‘rewarding’ enterprise customers with Software Assurance agreements by not increasing how much they are double-paying for Office 365,” Falcon said.

The Cumulus CEO explained that Enterprise editions of Office 365 embed the cost of MS Office licenses. As such, customers have already bought Office 365 and paid for upgrade protection.

“EA customers without Software Assurance are simply double-paying,” Falcon told CRN, adding, “I guess for Microsoft that is not enough.”

Singh, in retweeting the CRN story, stated the cost of cloud computing should be going down. But the Google executive had a suggestion for disgruntled customers.

“Move to @googleapps,” he tweeted.