Microsoft's price hike could hardly be worse timing

Timing, they say, is everything. Microsoft’s could not be worse.

There is huge scrutiny and discussion going on about the effects of supplier lock-in and the relative merits of proprietary and open software standards – a debate prompted by the government’s increasingly heated open standards consultation.

Microsoft, in particular, is often quoted as an example of the perils of lock-in. Look, for example, at the European Commission, an organisation that has purchased Microsoft software for 20 years without an open competition because of its reliance on the firm’s products.

Look also at the experiences of Bristol City Council, which found that it had little choice but to stick with Windows and Office instead of its preferred open source strategy.

Microsoft’s aggressive lobbying of the Cabinet Office over its plan for open standards is taken by critics as an example of trying to maintain a monopolistic grip established by proprietary products at its largest UK customer.

So what does the supplier go and do? Raise its volume licensing fees by up to 33%.

That’s right – a unilateral corporate decision that will mean well above inflation increases in the price of the most popular forms of licensing agreement for organisations buying Microsoft software. It’s happening under the auspices of introducing a harmonised pricing structure across Europe, and because of the weakness of the euro relative to the pound, UK customers are taking the biggest hit.

But it’s OK, because if you don’t like it, you can easily swap out your Microsoft products for something else, can’t you?

Can’t you? Oh…

The days of technical lock-in to suppliers and their products are surely nearing an end. “Ah, but there will always be some form of lock-in, even in the cloud,” say big suppliers. If so, it’s interesting to listen to CIOs, who advise each other that the first question to ask of a potential cloud provider is, what is the exit clause?

If Microsoft wants to convince IT leaders it is no longer a company stuck in the past and hanging on to old business models, huge price rises are neither the way, nor is now the time, to go about it.

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