It’s Brexploitation! Microsoft punishes UK for Brexit with cloud price-gouging

Redmond blames currency for UK-hosted Azure hike


“My own story would not have been possible but for the democratizing force of Microsoft technology reaching me where I was growing up,” CEO Satya Nadella told shareholders this week.

But the price of that “democratizing force” is about to go up, with Britons uniquely singled out. Microsoft has reiterated to Azure customers that prices will go up by 22 per cent from January 1st.

The problem? The price rise is far greater than any exchange rate post-Brexit fluctuations might justify. Microsoft’s biggest European data centre is in Dublin, a member of the Euro currency. The Euro hovered around €1.28 to one pound for the first six months of the year, before crashing after Brexit. It’s now €1.19, a depreciation of just 9 cents, or 7 per cent.

The value of the British pound has weakened more dramatically against the US dollar, dropping by 18.9 per cent since 24 June - the day after Brits voted to leave the EU.

For new Office or Azure cloud customers in the UK, no exchange rate can justify any price rise at all. In September, Microsoft made Azure available in UK data centres.

“Azure, along with Office 365, is now generally available from multiple UK data centre locations providing data residency to help enable the digital transformation of our customers in industries such as banking, government, public sector and healthcare that require certain data to remain within the UK,” wrote Azure GM Tom Keane.

Microsoft was coy in its memo - seen by us - to customers today:

Microsoft periodically assesses pricing of products and services across the globe to ensure there is reasonable alignment across the regions. This change to Azure prices is an outcome of this assessment. Microsoft previously announced British pound price changes to harmonize pricing for enterprise software and cloud services within the EU/EFTA region, effective January 1, 2017. This email is to confirm those previously announced changes to Azure pricing in British pound.

Starting January 1, 2017, British pound prices for Azure will increase by 22 percent to more closely align to euro pricing. Even after this adjustment, Azure customers across the region buying in British pound will find Azure offerings highly competitive.

Customers with volume licensing agreements will not pay the increased prices until their current arrangement expires. On-premise software prices are set to rise 13 per cent fromthe start of next year, but Microsoft previously refused to detail why this was the case.

Similar Azure price adjustments are being communicated to Azure customers in other markets. Azure prices in Indian rupee, Argentine peso, and Mexican peso will increase, and Azure prices in South African rand and Indonesian rupiah will decrease to realign to global levels.

Which is lovely.

Gartner veep John Lovelock previously told us - when VMware was raising it prices - that any vendor upping its prices in British pounds above 20 per cent could be accused of gouging.

To date, most of the major hardware players have raised their prices including HPE, HP Inc (twice), Dell, Fujitsu, Asus, and Lenovo (twice).

Amazon Web Services charges UK customers in US dollars, as does Cisco, so the price went up immediately after the referendum as the value of the US dollar soared. This has seemed like a fairer alternative.

So are the British being punished for exercising their political choice, and choosing to leave the European Union?

Microsoft declined to comment. But it sure looks like it. ®

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