• Ulrik Lehrskov-Schmidt

CASE: Preferred Pricing Partner for Microsoft Western Europe

I have helped Independent Software Vendors (ISV's) in the Microsoft Ecosystem help bring technologies to market, transition from license based on-prem models to SaaS since early 2018.


Company: Microsoft Western Europe

Stage: Corporate

“Ulrik is the only one we have found, who can make the bridge between all these new technologies and cost structures and turn it into a profitable business.” - Dirk Kooreman, Partner Development Manager

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Issue:

Microsoft has a large network of partners - from Independent Software Vendors (ISV's) to System Integrators (SI's) who are all part of Microsoft's overarching strategy to grow their Azure market share and top line revenue.


As such Microsoft often faces two key issues: partners don't know how to build SaaS pricing and business models and - second - they don't know how to account for the variable Azure cloud costs in their pricing. Unpredictable costs often places unknown risks within a business model which the software vendor can choose to either push onto the customer in the form of equally unpredictable and complicated pricing models - or simply take the risk themselves.


Microsoft needed an external advisor who could balance the complexity of the large ecosystem of Azure input prices with sensible pricing models for the ISV's products that end-customers would understand and accept.


“Ulrik adds that very specific component. He has the capacity to make the translation between pricing and usage. He helps us coach the software houses to transfer the uncertainties of flexible prices into simple pricing structures, so they and also their customers understand it and say 'ok I can start working with this'. That is what Ulrik is the only one we have found who can do.” - Dirk Kooreman, Partner Development Manager, Microsoft.

Preferred Pricing Partner

“We initially entered into contact with Ulrik, because we had a mission to complete within Microsoft. In our team we work with software houses, and our customers can be anyone who develop software to sell to their customers. Our division is here to help software houses make the digital transformation shift to cloud technologies.” - Dirk Kooreman, Partner Development Manager.


The network of partner managers across the Western Europe division of Microsoft introduce me to relevant customers and partners in their ISV and SI network whenever they need help with pricing, SaaS transformation or combining time & material based revenue models with recurring revenue models.


I engage directly with the relevant partner and with no commercial intervention from Microsoft. As such I'm also not representing Microsoft or Azure and have no obligation to promote or otherwise favour that relationship over the one I form directly with my client.



Select Microsoft Customers

I have helped - and continue to help - local Microsoft ISV's in Denmark, Norway, Sweden, The Netherlands, Belgium, Germany, France, Portugal, Italy, Spain, Switzerland and Poland.


I have done around 40 projects within the Microsoft ecosystem, including:

  • Create and implement packaging and pricing for large financial software solutions.

  • Transition market leading technology from on-prem perpetual to cloud based SaaS.

  • Take $100M ARR software solution from 60% to 85% net margin by raising prices.

  • Build Global Product Division and Product Strategy within large System Integrator.

  • Design pricing model for global health tech product with zero risk form Azure costs despite 3year fixed price contracts with Hospital customers.

  • Design financial SaaS reporting metrics and KPI's and align with existing reporting framework within large System Integrator.

  • Design land-and-expand model to plan for profitable customer lifetime value within EU tender limitations selling to Belgian municipalities.

  • Advising AI scaleup on pricing and offering to sell to large enterprise customers.

  • Create profitable global partner model for large open source software solution.

  • Done price calibration and discount strategies based on deep competitor price research.

  • Build out partner & reseller strategy, contract frameworks and pricing models.

  • Facilitate joint venture technology partnerships between

  • Help procurement negotiations to save $15M annually in SaaS vendor costs.

  • Assist in commercial negotiation of several large enterprise SaaS deals - from €500k to €60 million annually.

  • Assist in M&A deal structuring of the acquisition of SaaS companies.

  • Ongoing longterm advisor on a retainer basis to executives on the commercial development and expansion of their SaaS business.


Notable mention includes TietoEVRY, AGFA Group, SAXO Bank and Cegeka.


Results

The partnership with Microsoft has lasted and grown since early 2018.


“Ulrik makes sure that everyone in the company is involved and knows the advantages, risks and difficulties on the way to the best possible pricing strategy. To make sure that we translate the market opportunities, Ulrik and the ISVs, work together to find the right strategy. 
The knowledge, the experience, the results and that he always scores good point and receives great feedback, when he is working with our software companies, makes it a pleasure to work with him.” - Dirk Kooreman, Partner Development Manager, Microsoft.

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More Cases ?

I do about 20 SaaS pricing projects a year and function as an advisor for about 5-10 SaaS companies - large and small - on an ongoing basis, many of which I'm also an investor in. That said, most of my clients do not want to publish their results as openly as in this case (check logos on my front page) so if you can't find a case that matches your particular vertical or pricing issue - simply reach out and ask.