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Microsoft raises cloud prices for Australian enterprise customers

Despite the price hike, Microsoft claims its Azure service remains competitively priced, with opportunities for additional savings

Enterprises in Australia will have to pay up to 8% more for Microsoft’s cloud services, such as Azure and Office 365, from 1 January 2019.

The price hike results from Microsoft’s efforts to align its Australian dollar prices for cloud services with its global prices, according to information posted by Australian hosting and web design service provider Basehost.

Microsoft said it periodically assesses the impact of local pricing to ensure there is reasonable alignment with the market and that this change was an outcome of this assessment.

The software giant said the last such “pricing alignment” was made three years ago, claiming: “Customers across the region buying in Australian dollars will continue to find Microsoft cloud offerings highly competitive.”

It added: “Azure remains competitively priced versus AWS [Amazon Web Services], with opportunities for additional savings with offers like Azure Hybrid Use Benefits and Reserved VM Instances.”

Enterprises with existing orders under volume licensing agreements for products that are subject to price protection will not be affected by the price rise.

However, prices for new product additions under such volume licensing agreements and purchases under new contracts will be defined by the price list at the time of order, said Microsoft, while prices for on-premise commercial software will remain the same.

For indirect sales where Microsoft products are sold through resellers, final prices and currency of sale will continue to be determined by resellers.

Microsoft said any future changes to pricing will be assessed based on its internal pricing strategy and processes in order to maintain relatively stable prices while ensuring close alignment of prices to US dollar levels.

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For public sector customers, Microsoft said it has “taken a unified approach to price adjustment which will be equal for all categories of volume licensing customers, including commercial, government/public sector and academic customers”.

Microsoft operates two regions for Azure cloud services in Australia that handle protected and unclassified government data. The services are being delivered through datacentres operated by Australian-owned Canberra Data Centres.

According to Gartner, the global demand for public cloud services will grow by 17.3%, taking the global market to $206bn in 2019. Cloud demand is rising even faster in Australia, with the local market expected to grow by 20.6% to reach A$5.6bn over the next year.

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