Microsoft have announced that by January 2017 Prices for GBP customers will increase as follows
– 13% for on premise products
– 22% for cloud Products.
In the on premise world license prices for GBP and EURO were pretty much aligned (since 2012). With the GBP falling by approximately 12/13% the increase will therefore re-align GBP and EURO Pricing – Whilst this does not help UK customers it helps Microsoft in the sense that apart from the currency loss compensation it might prevent EURO Customers shopping for contracts in different countries (for example an international German company signing their contracts in the UK to obtain better pricing)
It was also announced that the online services will increase by 22% in the UK. With this price increase Microsoft is not only re-aligning the pricing in the UK due to currency fluctuations, there is an effective price increase of about 7% included in this re-alignment.
The main Enterprise online Services and bundles (full SKU’s) were cheaper in the UK vs. Europe, they will lose most of the price advantage and some may become more expensive by a few % points. (assuming conversion GBP /EURO of 1.27 in the past and new 1.12).
There may never have been a justification for GBP prices being lower for online Services provided from European datacentres and it may therefore be considered “fair” that prices are harmonised on a European level. On the other hand, the timing to introduce price increases beyond currency adjustments may cause additional concerns at already uncertain times in the UK. UK customers are great adopters and users of Cloud Services. Alternatives to avoid the 22% price increases are therefore limited.
If you are a UK customer and have an Enterprise Agreement that expires in the next few months, it may be a good time to engage with Microsoft and see if they will allow for an early commitment of your Enterprise Agreement renewal. If done in December this would lock in your pricing as per December pricelist.
We at Cloud Optics are experienced at advising and assisting customers in Enterprise Agreement renewal discussions. Please do not hesitate to reach out to us so we can see how we can best assist.