Microsoft 365 Price Increase: How MSPs Are Softening The Blow by Adding Email Security
In August of 2021, Microsoft announced changes to CSP and a price increase that comes into effect tomorrow, March 1st. The hike will see prices rise by a whopping 20% for monthly paying customers unless they move to an annual billing model, in a move that has angered many managed service providers.
Since the announcement, MSPs have been considering how best to approach to this undoubtedly frustrating conversation with their customers.
Having spoken to many MSPs over the past few months, here are some of the strategies MSPs are using:
1 - The MSP Owns The Risk
In some cases, the MSP is opting not to increase the price to their clients while keeping them on a monthly contract. Instead, the MSP is buying licenses for the year and taking a significant risk if the client goes out of business within that 12-month period. In these scenarios, the MSP has decided the risk of losing the customer due to increasing costs is greater than the risk of taking on that burden themselves. This approach is rare among the MSPs we’ve spoken with.
2 - The Customer Agrees To Pay Annually
A much more common outcome is that the customer agrees to pay for their Microsoft 365 licenses for a year in advance, avoiding the 20% price increase. This works relatively well for all parties as long as the customer can afford it. However, for many small businesses, this is simply unaffordable.
3 - The MSP Increases Their Prices
What is undoubtedly the most widely used approach is for the MSP to increase their prices. While some MSPs will do this inline with Microsoft (20% increase), others will go further - factoring in inflation and in many cases the fact they haven’t increased their own prices in several years. This can be difficult to get buy-in from the customer and has led MSPs to include additional services that help soften below.
Adding Value By Levelling Up Email Protection
For many MSPs that are increasing prices, including email security as a mandatory service helps soften the blow in several ways.
These can include:
1 - Email Security is Low Cost / High Margin
Email Security is a relatively low per-user cost buy price to the MSP. Because Mesh is a channel-only provider, MSPs are free to set their own prices, and many Mesh partners make over 100% margin.
2 - Visible and Tangible Benefit To The Customer
Email is still the biggest communication risk for businesses with over 90% of cyber attacks originating from email. By implementing Mesh, this risk is instantly mitigated and with end-user quarantine digests that contain unique stats, the value and efficacy of the service is evident to every single end user on a daily basis.
For what they spend on email security compared to the risk of financial loss and/or reputational damage, email protection is the best bang for their buck when it comes to cybersecurity.
3 - Improves Overall Security Posture
While Microsoft has made significant improvements on their email detection in recent years, it is still no match for specialist providers - especially when it comes to impersonation scams and Business Email Compromise.
4 - Standardization Across Your Client Base
Managed service providers are constantly striving for standardization across their client base but for many, it is common that a certain percentage of their client base have no email security in place beyond what comes free with Microsoft. In other cases, MSPs may have clients spread across multiple email security solutions all taking different SKUs.
These inconsistencies cost MSPs time and money every single month. By implementing Mesh as a mandatory or opt-out service along with the Microsoft price increase, MSPs can solve this problem and kill two birds with one stone.
Conclusion:
The imminent price increase from Microsoft has presented MSPs with a challenge. With the correct approach, this negative can be turned into a positive.
For more information on how Mesh helps MSPs to become more efficient and profitable, contact us for a demo or free trial today.