Microsoft announced late last week that prices will be increasing in the UK from January 1st. This has been expected for a while in the channel after the crash of Sterling versus the Euro and the US Dollar (the currency that Microsoft is based on).
FYI, Microsoft has price lists in different currencies for different markets. Those pricelists are based on what Microsoft expects the local currency to do versus the Dollar in the coming period, and Microsoft tries to keep things steady for as long as possible. But every now and then, something happens and a currency crashes and Microsoft starts to lose money, and they need to rectify things. June 23rd was that day.
The UK voted (insanely in my opinion) to leave the EU (I might think the EU has strayed wildly from what citizens want but I wouldn’t leave). On June 22nd, £1 = $1.467790822 USD. Today, £1 = $1.22280, roughly a 16% drop. Let’s put that in some real terms.
A licensed host (the minimum of 16 cores) running Windows Server Datacenter costs roughly £5,200 on Open NL, the most commonly quoted pricing method for MSFT software. On June 22nd, Microsoft earned, in US Dollars, $7,632.51 from that sale. Today, Microsoft makes $6,358.60 from that sale. That’s a drop in revenue of of $1,273.95 from a single sale.
So what’s happening? Microsoft is increasing prices as follows:
- On-premises software: 13%
- Cloud services: 22%
Before you start screaming at Microsoft, I’d recommend that you redirect your blame elsewhere. Microsoft did not sabotage UK Sterling and Microsoft is not a charity. Instead, look at those who did burn the Bank of England, namely the politicians, those who voted for Brexit, and those that were too lazy to vote.