Microsoft to increase prices after post-Brexit pound decline

October 26th
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Last week technology giant, Microsoft, announced that it is to increase the prices it charges British businesses for its software by up to 22%. This comes in response to the fall in the value of the pound following the EU referendum result.

The new pricing, which will come into effect on 1 January 2017, was confirmed by the company in a post on its TechNet UK blog. It stated that prices of its on-premise enterprise software, such as Office 365, will be increased by 13%, while prices for its cloud services will grow by 22%.

The changes come as part of a periodic assessment of its local pricing. The idea is to harmonise its local pricing to ensure reasonable alignment for enterprise software and cloud services within the EU/European Free Trade Agreement (EFTA) Region.

The unified price adjustment will only apply to new orders from commercial, public sector and academic customers. Customers with existing agreements will be protected from the price hike until they renew their subscriptions.

British businesses are being urged to bring forward any possible Microsoft cloud-based purchasesbefore the end of the year to avoid having to increase budgets or scrap other IT projects.

The price increases will have a significant effect on businesses if they don’t plan ahead. For example, purchasing 300 Office 365 Business Premium subscriptions before 31 December 2016, would cost £28,080 for 12 months. However, if the same services were purchased after 1 January 2017, the total cost would be £34,257 – a price increase of more than £6,000.

A full list of the programmes that will be affected by the price increase are as follows:

  • Microsoft Cloud Solution Provider (CSP) programme
  • Microsoft Open Licence agreement
  • Microsoft Products and Services Agreement (MPSA)
  • Microsoft Enterprise Agreement (EA)
  • Microsoft Online Subscription Programme (MOSP)

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Article extraction from Daisy Group