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SPLA price increases - how do you charge your customers?

Posted on 2014-01-20
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Last Modified: 2014-03-25
I guess this is more of a business question than a technical question.  I'm curious how other service providers are doing it and what they have found to be successful.  Our company is relatively new to the hosting market.  We typically sign a 3-year, fixed-cost contract with our customers.  This obviously has problems when Microsoft is allowed to increase their SPLA costs every year to whatever they want.  We include a modest "buffer" in our price to compensate for this.  But it's impossible to know if or by how much Microsoft will raise it's prices the following year.  Do you write that into your contract that the cost is subject to change depending on what MS decides what the new cost will be?  I do not see how a customer will agree to that.  So my question is - how do you do it?  Do you raise the price for existing customers when MS does, or do you eat the difference?  How can service providers be successful without knowing what the SPLA cost will be from year to year?
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Question by:ITLighthouse
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davorin earned 1500 total points
ID: 39795199
I'm not familiar with details in our contracts, but we are changing prices as Ms does. It is impossible to have a "modest buffer" and still be competitive, while Ms is rising prices for 20, 30, 40 and more %. On my opinion this is not good for our business, but I guess there is no other option then signing an annex to existing contract with every price change. The costumer still has the possibility to terminate the contract, if thinks that the prices are to high.
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