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Microsoft hikes UK software prices in post-Brexit fallout

With the pound down 18% on the dollar since the referendum vote, Microsoft has become the latest US vendor to hike up its prices

Everyone knew it was only a matter of time, and on Friday, Microsoft announced that it would hike the prices of its cloud and on-preimse software in the UK by as much as 22%.

The Redmond firm managed to steer clear of mentioning Brexit specifically, focusing on the currency consequences, rather than the event itself. 

“From January, British pound prices for on-premises enterprise software will increase by 13% to realign close to euro levels.  Most enterprise cloud prices in British pounds will increase by 22% to realign close to euro levels,” Microsoft said in a statement. 

Since the referendum, the value of sterling has fallen by roughly 18% against the dollar, the currency in which most major IT vendors booking their revenues. This has led to a raft of ‘harmonisation’ efforts across the industry. Hardware manufacturers were among the first to increase prices. In July, Dell - now Dell Technologies - announced a blanket 10% increase on all if its UK retailers. This was followed quickly by HP and several other component-makers, all tweaking their pricing strategies.

For the channel, Microsoft's announcement may be a short-term blessing and a long-term curse. While resellers will be the bearers of bad news, there is likely to be an influx of business, as companies race to get locked into existing pricing.

“For business customers, these changes will not affect existing orders under annuity volume licensing agreements for products that are subject to price protection,” Microsoft told its UK customers. “For example, customers with Enterprise Agreements have price protection on previously ordered enterprise software and cloud services, and will not experience a price change during the term of their agreement.”

The American giant argued that even after the adjustment, its cloud offerings were ‘highly competitive’. 

“For indirect sales where Microsoft products are sold through resellers, final prices and currency of sale will continue to be determined by them. In the EU/EFTA region, partners will continue to have access to prevailing prices in euro, Norwegian krone, Swiss franc, Swedish krona, and Danish krone, along with revised prices in British pounds,” Microsoft said.

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