Microsoft made no secret of the fact that it would have preferred the United Kingdom to remain part of the European Union, but even after the UK voted to leave the EU in its 'Brexit' referendum, the company made it clear that it would continue to invest there. But following that referendum result, the cost of doing business in the UK has increased for many international companies, as pound sterling is now considerably weaker against some other major currencies than before the vote.
Consequently, Microsoft has become the latest multinational firm to announce significant price increases in the UK.
The price hikes will target Microsoft's business and enterprise customers, and will come into effect on January 1, 2017. On-premises enterprise software pricing will rise by 13% "to realign close to euro levels", while enterprise cloud costs will increase by 22%.
"Even after this adjustment," Microsoft said, "customers across the region buying in British pound will still find our cloud offerings highly competitive." Microsoft also noted that it regularly assesses the impact of local currency changes on the pricing of its products and services, and that these revisions to UK pricing are similar to adjustments that it made for sales in Norwegian krone and Swiss francs earlier this year.
Microsoft emphasized that these pricing changes won't immediately affect customers with existing agreements:
For business customers, these changes will not affect existing orders under annuity volume licensing agreements for products that are subject to price protection. For example, customers with Enterprise Agreements have price protection on previously ordered enterprise software and cloud services, and will not experience a price change during the term of their agreement. Similarly, business customers with cloud commitment subscriptions such as Office 365 also receive price protection during their subscription term, which is normally twelve months from the start of paid subscription.
However, any additions to existing agreements will be charged at the new, higher rates from January 1, and existing customers entering into new licensing agreements and purchases after that date will also have to pay the new rates.
Microsoft isn't the only tech company to raise its prices in the UK as a result of Brexit-related currency fluctuations. Dell and HP both increased their prices by 10% there in July, while HTC bumped up the price of its Vive virtual reality headset by 10% in August. OnePlus also raised the cost of its 3 flagship phone by 6.5%.
Source: Microsoft UK | Thanks for the tip, JP!