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Microsoft to HIKE Azure prices as exchange rates shift
Eurozone, Danes, Norwegians, Swedes, Canadians and Aussies to cop a hit
Update Over the last few years, Google, Amazon Web Services and Microsoft have all announced price cut after price cut, but Redmond is about to increase prices for its Azure cloud.
A Microsoft spokesperson told us the company “... continues to evaluate the market conditions in the countries in which we operate. As a result, we will be adjusting the prices for the company’s enterprise cloud services in Australia, starting 1 August, 2015.”
The price rises certainly look to be happening in Europe: Blogger Aidan Finn has posted excerpts from Microsoft emails mentioning an 11 per cent rise in the Eurozone and 26 per cent in Australia.
The Reg understands that Microsoft is telling customers that changes in exchange rates make the rises reasonable. The Euro's not the world's strongest currency at present. In Australia, when Microsoft started operating its two Australian Azure regions one Australian dollar bought 94 US cents. A year later, China's decreased interest in commodities has seen prices for Australian iron ore and coal plunge. A resurgent US economy has helped to drive the Aussie Dollar's buying power down to 74 US cents.
The Reg understands Microsoft sets its regional prices by considering local operational costs and the prevailing exchange rate, making this an adjustment using existing methodologies.
Yes, some of Microsoft's costs in its European and Australian bit barns are sunk costs, but it's not as if wages or electricity prices or taxes are falling. So a price rise looks to be in order, if Redmond's antipodean and European outposts are to deliver the required stack of simoleans back to HQ.
Just about every earnings conference call to which The Reg has listened of late includes caveats about revenues and profits alike being dented by currency-related matters. On the basis of those warnings, Azure costs may well rise around the world. Throw in Greece's decision to go its own way, the strengthening US Dollar and there's plenty of turmoil out there that could make Azure under-priced in plenty of locales.
It will be interesting to see if Amazon Web Services (AWS) and Google follow Microsoft's lead. Both have made much of their ability to keep prices low, and falling. All three companies are also under pressure from forthcoming legislation aimed at making it harder to use legal-but-cynical tax dodges. ®
Microsoft's been in touch to clarify the statement it sent yesterday, as it now says the spokesperson's statement that “These changes are worldwide” was in error.
Here's Redmond's new verbiage, explaining exactly where Azure prices will rise:
“Cloud prices are being revised for new and renewing contracts billed in euro, Danish krone, Norwegian krone, Swedish krona, Canadian dollar and Australian dollar. Until July 31 2015 customers can continue to acquire Microsoft cloud products at current prices, as well as renew licensing agreements at current prices before the adjustment.”