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Microsoft UK volume licensing prices to rise significantly

by Mark Tyson on 24 October 2016, 11:01

Tags: Microsoft (NASDAQ:MSFT)

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Shortly after the Brexit vote HEXUS reported on the rather swift price increases that companies such as HP, Dell, and OnePlus were about to implement, due to the value of the GBP being hit hard. Between then and now there has been more of this kind of price action creeping up on UK dwellers. Just ahead of the weekend Microsoft announced that it too would have to ask for more British pounds from UK-based businesses, due to GBP's decline.

Microsoft's announcement concerns customers buying enterprise software and cloud services in the UK. From 1st January 2017 it is increasing prices in GBP to "harmonise prices for enterprise software and cloud services within the EU/EFTA region". It says it did a similar price review in Norway (Krone) and Switzerland (Francs) earlier this year. In the UK we are going to have to endure the following increases:

  • British pound prices for on-premises enterprise software will increase by 13 per cent
  • Most enterprise cloud prices in British pounds will increase by 22 per cent

Microsoft says that its enterprise cloud prices remain "highly competitive," even after the above increases… However, if you are a business customer already, with annuity volume licensing agreements and price protection you will not have to suffer any price increase for the term of your agreement. Also many Office 365 subscribers have a year agreement and thus won't be impacted by the price increase until it's time to renew.

Ending its volume licensing update blog post, Microsoft says that the pricing changes outlined above don't apply to consumer software and services. That's not to say these, and other Microsoft product prices, won't be adjusted separately.

GBP to EUR Chart from November 2015 to today, via XE.com.

HEXUS Forums :: 18 Comments

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Posted by 1stRaven - Mon 24 Oct 2016 11:38
That is not a small increase. We are going to be looking at an additional £50k per year to cover this. Ouch.
Posted by DanceswithUnix - Mon 24 Oct 2016 12:50
I presume this balances the price reduction they gave us during the currency rise from 2013 to 2015? ;) :D

Hopefully Centos and Debian will pick up some users from this. Their license fees are still zero, support tends to be easier as well.
Posted by CAT-THE-FIFTH - Mon 24 Oct 2016 13:52
So basically more or less the value by which the pound has dropped then?? Microsoft can't be blamed for the currency markets.
Posted by LSG501 - Mon 24 Oct 2016 14:58
It's all very well increasing prices when the value against the dollar drops but we don't seem to get the same reduction when it increases….
I can see quite a large shift away from MS in the UK business sector, 22% is almost a quarter of the cost again and in larger businesses I'm sure they could be looking at the price analysis of changing to linux etc and working out it would cost less than the increase to change.
Posted by CAT-THE-FIFTH - Mon 24 Oct 2016 15:33
LSG501
It's all very well increasing prices when the value against the dollar drops but we don't seem to get the same reduction when it increases….
I can see quite a large shift away from MS in the UK business sector, 22% is almost a quarter of the cost again and in larger businesses I'm sure they could be looking at the price analysis of changing to linux etc and working out it would cost less than the increase to change.

The problem is even the paid for support commercial versions of Linux will probably increase in price too. The same for any software or hardware services and products which are paid for in dollars. ATM,people are not realising the extent of this and unless the pound rebounds I expect a lot of computing related services and products will go up massively in price next year.

You only need to look at the cost of something like a Core i3 - prices are now hitting £110 to £120 for the lowest end SKU(as opposed to closer to £90 to £95 last year) as more and more retailers refresh stocks. Intel has not increased the USD price at all. Now retailers could cut margins but that means they probably will have to pay less to their staff,etc.

We can all moan at companies trying a fast one(I certainly have),but I can't really blame companies for the latest ones. Look at people whining at Unilever trying to increase prices when they probably have to import raw materials to make their products and those imports now cost more money.

Then if companies like Unilever didn't do that and froze pay due to lower margins,people would be moaning at them for not increasing pay,exploiting workers,etc.

Remember,when the pound was worth nearly $2,lots of electronics was quite cheap here so we can't really complain if it goes the other way if it is worth 40% less can we?? ;)

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