Microsoft hikes enterprise software, cloud prices

October 24, 2016 | 11:00

Tags: #brexit #cloud-computing #financial #licence #licensing #price-rise

Companies: #european-union #microsoft

Microsoft has confirmed that it is passing on the effect of the weak Pound to its customers, starting with 13-22 percent price hikes for its enterprise users.

Since the result of the referendum for the UK to leave the European Union and the resulting political and financial upheaval, the value of the Pound Sterling has taken a battering: earlier this month the currency hit a 31-year-low against the US Dollar, and while experts are arguing the likelihood of further drops versus possible recovery it currently stands at $1.22 to £1 from $1.49 pre-referendum. That drop has been enough for companies to begin raising prices, and Microsoft has confirmed it plans to do exactly that as a result of the increased costs of a US business operating within the UK.

The price hikes will hit enterprise customers first: Microsoft's software licensing costs are to increase by 13 percent while its cloud computing services will jump 22 percent, both considerably higher than the roughly-10-percent price increases introduced earlier this year by companies including Dell, HP, and HTC. Microsoft has stated that the changes 'will not apply to consumer software or consumer cloud services,' but has not gone so far as to state categorically that it won't be changing these prices too in the near future.

For customers already tied in to licensing agreements and cloud computing contracts, the changes won't be immediately obvious: Microsoft has announced that annuity volume licensing agreements are locked by their price protection plans, and existing subscriptions to services like Office 365 won't change. Come renewal or addition of new licences, though, the higher rate will apply following its planned introduction in January 2017.

More information on the changes can be found on Microsoft's official announcement.
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