Microsoft hikes volume prices by more than a third

Redmond's Euro vision sends UK channel scrambling

Microsoft will ramp up the cost of volume licensing by as much as a third from the start of July when it aligns list prices across Europe to the Euro currency.

The move, which affects the prices of products bought in bulk by organisations, was initiated following complaints from Microsoft bosses on the continent that were losing revenue to the UK channel, which had benefited from the lower valuation of sterling to undercut them.

Initially, Microsoft said in February the rise would be capped at single digit percentage points, but partners expected a hefty double-digit hike and were today proved right in a preview 60 days ahead of the overhaul.

The rises range from 7.5 per cent on the price of Open Classic (OC) licences to corporate customers - the only single digit rise - to 33.4 per cent on the same SKU for government customers.

Microsoft's volume licensing price menu from July 2012 (click to enlarge)

A Microsoft spokesman said in some PR blurb to El Reg that the Windows 8 giant was "taking action to establish and maintain price consistency in the region for volume licensing".

"The majority of UK business customers purchasing Microsoft products from partners buy through the Open volume licensing programme, which is particularly popular with small business," he said, highlighting that this was least hit.

He added that from July the single list price irrespective of currency will "help to create a vibrant ecosystem for our partners".

All in the channel are busily ferreting away to ascertain if they will now have price parity with European dealers or be at a slight disadvantage. The calculation from Microsoft is based on the current exchange rates and are subject to slight declines or increases depending on what happens to the economies across the region before 1 July.

The prices to the UK's government bodies are also based on Microsoft's Public Sector Agreement of 2009, but the Cabinet Office struck a deal with Redmond in December to discount the framework by 16 per cent.

The time is ticking for customers to buy a licence, such as an Enterprise Agreement that locks down current pricing for three years, or consider alternative options.

"Older individuals in the industry may remember that when Microsoft moved from Upgrade Advantage to Software Assurance about eight years ago, they gave customers ten months of notice," said one dealer.

"There are serious implications to this announcement but customers have a relatively shorter period of time," he added.

Microsoft's fiscal 2012 ends in June and resellers are anticipating a spike in business, "a bit of quantitive easing" in a tough environment, but on the flip side Q1 2013 could be a relatively quiet time for the vendor. ®