Tag: IT

How to Navigate the Huge Price Uplift of Microsoft 365 Copilot: Software Contract Negotiation Tips for Enterprises | Blog

Microsoft’s recent rollout of its Artificial Intelligence (AI)-enabled productivity tool Microsoft 365 Copilot for enterprise customers has generated a lot of buzz. Its steep US$30 monthly charge per user has ignited debate about how its cost will impact IT spend, the Return on Investment (ROI), and the expected benefits for employees. Continue reading for recommendations on successful software contract negotiation for Microsoft 365 Copilot.

Microsoft 365 Copilot is a productivity enhancement tool backed by generative AI and integrates with the Office 365 Suite (Word, PowerPoint, Excel, Outlook, Teams, etc.). It aims to transform employees’ daily tasks by unlocking creativity, boosting productivity, and enhancing skills.

By leveraging Large Language Models (LLMs) content in Microsoft Graph (emails, chats, attachments, documents, etc.) to generate contextualized human-like responses, and touted by Microsoft as the “most powerful productivity tool on the planet,” the tool boasts numerous applications and use cases.

How can enterprises buy Copilot?

Copilot is available for Microsoft 365 E3, E5, Business Standard, and Business Premium customers. It is an add-on license on top of these M365 editions and isn’t available as part of any bundle.

Price Surge for Copilot Adoption

Microsoft 365 Copilot comes with a hefty price tag of US$30 per user per month. The following table summarizes the additional costs that enterprises are looking at when considering buying Microsoft 365 Copilot licenses. (Based on list prices.)

M365 Bundle M365 List price (per user per month) Cost uplift
M365 E3 US$36 83%
M365 E5 US$57 52%
M365 Business Standard US$12.50 240%
M365 Business Premium US$22 136%

This does not paint a very attractive picture for IT and procurement departments as the cost increase can be greater than a company’s current spend on the M365 suite.

Adding to the complexity, Microsoft has yet to reveal how they will apply the contracted volume discount on the Copilot licenses an enterprise purchases.

Software contract negotiation tips

Everest Group helps clients across geographies and industries with software contract negotiation techniques to optimize their software spend. Almost all our enterprise customers have large deals with Microsoft. We help them navigate price increases at contract renewal, negotiate best-in-class discounts, and optimize key contractual terms like price protection clauses, etc.

Below are some measures enterprises can take to mitigate this significant cost increase and assure a robust ROI when adopting Microsoft 365 Copilot in their organizations:

  • Optimize spend for the overall Microsoft portfolio of an enterprise: Microsoft’s move to limit the eligibility to purchase Copilot solely to customers with M365 E3 and E5 subscriptions subtly pushes other enterprise customers to upgrade to these options, thus increasing their spend with Microsoft.

Even for existing M365 E3 customers (many of whom settled for this lower-cost option compared to E5 licenses), the total cost of M365 E3 plus Copilot ($66/user/month) is more than the M365 E5 license ($57/user/month). As a result, justifying investing in this new tool is financially difficult. Enterprises looking to buy Copilot licenses should ask Microsoft to improve their overall cost to make it easier to seek budget approvals and drive Copilot adoption

  • Optimize Copilot licenses: While Copilot benefits look promising, the actual impact is yet to be assessed. Given the different nature of work of employees across an organization, the tool might be more effective for some user groups. Therefore, enterprises should conduct a thorough persona profiling to determine the correct number of users who should be given access to this tool to maximize ROI. This step will help ensure enterprises get the most out of the M365 Copilot licenses required
  • Seek training investment: Given its wide range of applications and methods of use, Copilot will require training and support for employees to uncover the true potential of this tool. Enterprises should ask Microsoft to provide complementary training and workshops to increase M365 Copilot adoption

Microsoft Copilot is undoubtedly a futuristic tool aimed at streamlining daily operations and helping employees focus on tasks that add real value. Nonetheless, understanding its licensing, pricing strategy, and the value it can generate for an enterprise is imperative.

To discuss software contract negotiation and for a detailed analysis of your software contracts, please reach out to [email protected]. Explore more about Everest Group’s contract benchmarking offerings.

To learn about the major concerns, expectations, and trends for 2024 and hear recommendations on how to drive accelerated value from global services watch our annual webinar, Key Issues 2024: Creating Accelerated Value in a Dynamic World.

The Last Word: Showcasing Uzbekistan’s IT potential | In the News

Rohitashwa Aggarwal, Partner at Everest Group, first started looking at Uzbekistan several years ago and its growing IT sector.

“When we look at firms operating in the UK, about a quarter make use of IT talent based in the UK, another quarter is based in Europe, another quarter in India, and the fourth quarter is based throughout the rest of the world,” he said.

Considering the wide range of incentives that Uzbekistan’s IT Park has to offer, it could be a viable alternative.

Read more in Emerging Europe.

Operational Technology (OT) Security Products PEAK Matrix® Assessment 2023

Operational Technology (OT) Security Products

The convergence of IT and Operational Technology (OT) profoundly impacts the OT security landscape, enhancing operational efficiency while introducing vulnerabilities as traditional OT systems integrate with IT networks. Industries recognize the need to protect operational technology systems from escalating cyber threats, leading to a surge in demand for OT security. High-profile attacks on critical infrastructure drive investment in OT security solutions to ensure the integrity, availability, and resilience of essential operations.

As a result, organizations are increasingly investing in OT security measures, including network security, advanced asset visibility, threat detection, incident response plans, and risk and vulnerability management, to protect critical infrastructure and minimize cyber risks while embracing the benefits of IT/OT convergence. Technology providers are investing in next-generation themes in the OT security landscape, including AI-driven threat detection, integration of behavioral analytics, and robust cloud-based solutions. Supply chain security and collaborative information sharing are also on the rise, strengthening critical infrastructure protection and enhancing OT cybersecurity in the face of evolving threats. Technology providers are actively developing industry-specific OT security solutions for sectors such as energy, manufacturing, and healthcare. These solutions effectively address threats specific to each sector, ensure compliance with industry regulations, and maintain operational continuity. This approach offers a comprehensive and customized solution to safeguard critical infrastructure and industrial control systems. The OT security sector is actively pursuing enhanced capabilities and building a strong partnership ecosystem to combat the escalating cyber threats within OT environments.

Operational Technology

What is in this PEAK Matrix® Report

In this report, we analyze nine global OT security technology providers as featured on the Operational Technology (OT) Security Products PEAK Matrix® Assessment 2023. The research will help buyers select the right-fit provider for their needs, while providers will be able to benchmark themselves against each other.
 

In this report, we examine:

  • OT security products PEAK Matrix® characteristics 
  • Enterprise sourcing considerations
  • Providers’ key strengths and limitations

Scope

  • All industries and geographies
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading OT security technology providers, client reference checks, and an ongoing analysis of the OT security products market

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Digital Interactive Experience (IX) Services PEAK Matrix® Assessment 2023 – Europe

Digital Interactive Experience (IX) Services – Europe

Within Europe, there is a paramount emphasis on crafting experiences that not only meet the expectations of customers and employees but also align with the region’s robust commitment to sustainability and ethical practices. Corporations recognize that a focus on sustainability not only enhances their brand but also resonates with the growing eco-conscious European consumer base.

This emphasis on sustainability-led experiences extends beyond the corporate domain, reflecting the broader values of European society. It goes beyond the provision of quality products and services, emphasizing the necessity to ensure these offerings are in harmony with environmental and social responsibility. The escalating demand for experience services among enterprises is propelled by the strategic leverage of emerging technologies and a compelling sustainability-driven narrative. This underscores the convergence of technology and sustainable practices within the business landscape.

Consequently, experience design has ascended as a pivotal force shaping the trajectory of European enterprises. It reinforces their steadfast commitment to responsible and impactful business practices, highlighting their instrumental role in advancing sustainable development in the region.

Digital Interactive Experience

What is in this PEAK Matrix® Report

In this research, we present an assessment of 21 service providers featured on the Digital Interactive Experience (IX) Services PEAK Matrix® Assessment – Europe 2023, a comprehensive matrix that evaluates and categorizes service providers in terms of their capabilities in the space. 
 

In this report, we:

  • Assess 21 leading European digital IX service providers and design agencies on Everest Group’s PEAK Matrix® evaluation framework
  • Categorize providers as Leaders, Major Contenders, and Aspirants
  • Evaluate providers’ key strengths and limitations

Scope

  • All industries
  • Geography: Europe
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading IX service providers, client reference checks, and an ongoing analysis of the digital IX services market

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Talent Readiness for Next-generation IT Services PEAK Matrix® Assessment 2023

Talent Readiness for Next-generation IT Services

Amid the rapidly evolving technology landscape, enterprises face a primary challenge: the shortage of talent equipped with next-generation skills as they advance in their digital transformation endeavors. This challenge is further exacerbated by the shortening half-lives of skills and higher attrition rate in emerging skills within organizations. To address this challenge, enterprises are seeking IT service providers that have implemented robust talent development and management strategies. These strategies strive to acquire, nurture, and sustain a high-quality, productive, multi-skilled, and diverse workforce to meet evolving talent needs.

IT service providers are responding by investing in in-house talent development to gain a competitive edge and enhance their talent value proposition. Beyond traditional methods, they are exploring multiple innovative methods and incorporating themes related to the future of work in their talent development and management strategies. The goal is to develop and sustain a comprehensive portfolio of diverse resources equipped with next-generation skills.

Next-generation IT Services

What is in this PEAK Matrix® Report

In this report, we assess 26 IT service providers featured on the Talent Readiness for Next-Generation IT Services PEAK Matrix®. The research will help buyers select the right-fit provider for their needs, while providers will be able to benchmark themselves against each other.
 

In this report, we:

  • Evaluate 26 IT service providers featured on Everest Group’s Talent Readiness for Next-generation IT Services PEAK Matrix®
  • Present the characteristics of Leaders, Major Contenders, and Aspirants from a talent readiness perspective
  • Analyze providers’ key strengths and limitationsr 

Scope

  • All industries and geographies
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading IT service providers, client reference checks, and an ongoing analysis of the IT services market

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LEARN MORE ABOUT Top Service Providers

IT Midcaps Witness BFSI-led Growth as Larger Peers Take a Hit | In the News

At a time when large IT companies are seeing BFSI (banking, financial services, and insurance) vertical-led softness, the same is aiding the growth of some midcap companies. The reason is that smaller IT firms cannibalize larger companies’ BFSI revenue.

Peter Bendor-Samuel, CEO of Everest Group, said, “Midcaps are going after a different part of the market — the regional banks. In general, the large firms have huge estates in the large banks and BFSI clients.”

Read more in Financial Express.

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