How to Demystify Azure Discounting and Navigate Cloud Contract Negotiation | Blog

Cloud contract negotiation with Microsoft for Azure can be complex. By better understanding the cost reductions available at the contract and resource/functional levels, enterprises can maximize their return on investment. Read on to decipher the discounts and get the best cloud value from Azure.

You can also reach out to schedule a briefing with an Everest Group analyst for guidance on how you can uncover Microsoft Azure discounts and drive significant cost savings. Reach out

Microsoft’s public cloud offering, Azure, grew more than 20% year-over-year in 2022, driven by its long-standing partnerships and deep technical integration across different product portfolios with major enterprises. Over the years, Microsoft has successfully onboarded many existing O365, M365, etc., customers to Azure while attracting a new set of customers. To get the most value from this popular platform, procurement organizations must be aware of the nuances of cloud contract negotiation with Microsoft for Azure.

Cost is an important factor in an enterprise’s decision to move to Azure or any other public cloud. Locking in the right discounts is crucial to lower cloud operational costs and maximize the value generated from cloud. Enterprises should be well-versed in the types of discounts offered to prevent value leakage in their contracts.

Like the other major hyperscalers, Azure uses a dual-layer discounting approach as follows:

1. Contract level discounts – Azure Commitment Discounts (ACDs)
2. Resource/functional level discounts

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Let’s explore each of these categories further:

• • Azure Commitment Discount – This discount is built into Azure’s contract and is typically contingent on the following criteria:
    • Customer’s total spend commitment
    • Length of the engagement
    • Prior relationship with Microsoft
    • Strategic value (logos and markets) to Microsoft
    • Contracting route – Direct (Enterprise Agreement) or Indirect (via Cloud Service Provider)
  • Resource or functional level discounts – Also known as programmatic discounts, enterprises can take advantage of these reductions by committing to spend a certain amount of time or money on cloud resources.

Microsoft estimates the following discounts are possible using these approaches:

• • • Reserved instances – By committing to one- or three-year consumption terms for Windows and Linux virtual machines (VMs), customers can expect cost reductions of up to 72% versus pay-as-you-go rates

• • • Azure savings plan – With a committed spend of a fixed hourly amount on compute services for one or three years, customers can save between 11-65% on pay-as-you-go rates

• • • Spot instances – Customers purchasing temporary VMs for low-priority workloads from a pool of unused spare capacity can get significantly deep discounts of up to 90% compared to pay-as-you-go rates

• • • Azure hybrid benefits – This option can help customers save up to 85% in license costs by reusing on-premises licenses

In addition to discounts, credits, incentives, and regular promotional programs run by Microsoft also can help enterprises lower their cloud expenditure. Enterprises also should investigate these options to optimize their Azure investment.

By optimizing IT architecture to realize resource and functional level discounts and effectively negotiating contract-level discounts, procurement teams can ensure they get the maximum value from an enterprise’s Azure investment.

To better understand these discount categories on Azure and discuss other cloud contract negotiation tactics, please reach out to [email protected].

Schedule your briefing with an Everest Group analyst for guidance on how you can uncover Microsoft Azure discounts and drive significant cost savings.

Protecting Against Remote Cyber Threats with a SASE Framework | Blog

Remote and hybrid work models combined with the shift to cloud services have exposed enterprises to complex digital threats and cyberattacks that traditional security measures can’t effectively thwart. But a next-generation framework called Secure Access Service Edge (SASE) can help transform enterprises’ IT infrastructure by unifying network and security features. Learn more about the SASE solution in this blog. 

Contact us if you would like to discuss this topic further or if you have any questions.

Today’s cyber threats introduced by the rise in remote work have made securing data with traditional network and security measures like firewalls and virtual private networks (VPNs) increasingly challenging. A new solution, Secure Access Service Edge (SASE), can help enterprises address the following key needs:

Zero trust: Enterprises’ post-pandemic move to hybrid and remote work models essentially means employees can “connect from anywhere.” Traditional security models based on perimeter-based defenses have proven ineffective against sophisticated attacks such as phishing, ransomware, and credential theft. Most enterprises realize the immediate need for zero-trust security services, given the possibility and evolution of different threat vectors.

Cloud visibility: With the increased adoption of cloud-based resources, applications, and services, traditional network security approaches are becoming less effective. All enterprises need to monitor and understand the usage, performance, and security of their cloud resources. Challenges like shadow IT, unauthorized data access, compliance violations, etc., must be addressed to maintain a secure cloud environment.

Real-time threat detection: Cyberattacks are becoming increasingly sophisticated in today’s threat landscape, and enterprises must have the capability to detect and respond to threats quickly to minimize the impact of attacks.

Single pane of glass monitoring: Traditional security solutions offer products and point solutions from multiple vendors, which can create a complex and disjointed security stack solution. This can result in overlapping and redundant security controls, increased costs, management overhead, and potential security gaps.

How the SASE Framework addresses these challenges

SASE is a cloud-based framework that integrates multiple security services and network functions into a single platform. SASE can help enterprises address the complex and evolving cybersecurity landscape by providing a flexible, scalable, and unified network security approach.

By combining multiple technologies into a single platform, it provides a holistic and efficient way to protect an enterprise’s digital assets while ensuring employees can work securely from any location.

This integrated approach enables organizations to simplify their security stack, improve their security posture, and reduce the time and cost of managing multiple security solutions.

Implementing a SASE solution

Here are some recommendations to consider when moving to SASE:

• Choose the right vendor

Selecting a SASE vendor that aligns with the enterprise’s requirements will increase the probability of success. Factors such as technology innovation, industry experience, and customer satisfaction should be considered

• Integrate with existing technologies

Devising a comprehensive plan for integrating the enterprise’s existing network infrastructure with the new SASE solution can help ensure seamless compatibility with network components such as routers, firewalls, etc.

• Phase the implementation

Implementing the SASE solution in phases, starting with the most critical applications and services, can help identify and address any issues or challenges before rolling out the solution across the entire organization

• Define the requirements

Defining the enterprise’s requirements and objectives, including security needs and network performance, can help the enterprise select the right solution

Key elements in the complexity of a SASE solution

Implementing and managing SASE solutions is complex because of the many different factors involved, including the end users, technology stack, cloud service providers, and data centers, as illustrated below:

SASE managed services commercial models   

As a relatively new technology, SASE pricing depends on several factors like specific features and capabilities offered and the number of end users. Below are some pricing models offered by service providers that we see in the market:

• Per-user pricing

Providers offer a per-user pricing model, where the organization pays a fixed monthly fee per user. This model is observed in variable user environments.

•  Tiered pricing

A few SASE providers offer pricing based on tiers, where varying sub-services are available at different price points. For example, a basic plan may include essential features like a firewall, and an advanced plan may include features like a Cloud Access Security Broker (CASB), Zero Trust Network Access (ZTNA), etc.

• Fixed fee pricing

The SASE provider charges the client a fixed fee for a particular set of pre-defined services and may charge more for additional features or services. This is typical in organizations that have more predictability in users.

With the rise of remote and hybrid work models, we expect many enterprises to adopt the SASE framework as a solution to their networking and security needs as part of their short- and long-term strategies.

For insights on the SASE framework, pricing, and benchmarks, please reach out to [email protected] and [email protected].

Evergreen Services: The New Age Answer to Capex Crunch | Blog

In today’s fiscally and environmentally conscious times, a differentiated technology asset ownership model can help enterprises both reduce capital expenditures and improve sustainability. Read on to learn about the rise of evergreen services.

Now more than ever, enterprises are under increased pressure to rationalize expenses in the current unpredictable global business climate with the ongoing Ukrainian war, recession clouds, etc.

At the same time, enterprises around the world are quickly pivoting and incorporating sustainability as a key component of their innovation charters. Topics like reuse, recycle, and electronic waste (E-waste) management are looked at with increasingly serious and concerned lenses.

Over the last few years, device as a service (DaaS) and especially evergreen services (as a variation of DaaS) have emerged as an attractive option for enterprises to simultaneously tackle both Capex reduction and environmental sustainability commitments. Overall, DaaS is projected to grow at a compound annual growth rate of 10-15% this decade, and evergreen service is expected to contribute heavily to this growth.

What are evergreen services?

DaaS is the bundling and offering of management services and IT equipment – like personal computers, smartphones, and mobile devices – in a paid subscription model, as an alternative to purchasing these devices individually.

By extension, evergreen service is an end-user asset ownership model that helps customers convert their device acquisition-related Capex to an operating expense (Opex) while simultaneously rationalizing management overheads and providing users with increased flexibility and improved experience.

In contrast to DaaS, evergreen service puts a greater emphasis on sustainability and device performance management, and reusability. The primary focus is on meeting pre-set device performance standards, regardless of the age of the device. It also allows customers access to the latest technologies and customized services, such as device configuration, installation, data migration, on-site support, technology refresh, etc., without incurring large upfront costs.

Evergreen services: The key benefits

Evergreen services can help enterprises achieve their sustainability goals. The core philosophy of this construct is reducing e-waste by upgrading existing devices to meet performance parameters versus replacing devices outright. Existing devices are kept current and performant via updates/upgrades, spare replacement, etc. This is a stark departure from the traditional DaaS model, where devices are mandatorily replaced at the end of a pre-defined number of years.

Evergreen service also improves the user experience, creates a more stable environment, and reduces overall incidents. Due to an increased focus on proactive monitoring and managing end-user devices, a large portion of device issues are proactively identified, and preventive actions are taken to avoid service interruptions to end users. To enable this, a dedicated/shared monitoring team is deployed to perform eye-on-the-glass monitoring of the device estate using a digital experience management (DEM) tool.

The table below summarizes the key differences between evergreen and traditional DaaS models:

Evergreen services are slightly more expensive on paper compared to traditional DaaS services. But the long-term benefits of improved user experience, reduced incidents, and sustainability value make evergreen services an attractive proposition for today’s environmentally conscious businesses.

If your enterprise is interested in evergreen services, its pricing model, and price benchmarks across geographies, please email [email protected].

Learn more about current pricing and tech services our recent blog, Demystifying Common Low Code Pricing Models and How to Choose the Right Platform.