More changes from Microsoft: New Pricing updates from April 2023

Microsoft has recently announced that starting in April 2023, there will be semi-annual pricing updates to account for exchange rate variances.

Why is Microsoft moving to semi-annual price updates?

Previously, Microsoft has updated their prices globally as required, but with the recent events such as the Covid pandemic and the war in Ukraine, adjustments accounting for local currency fluctuations had been paused, leading to an imbalance in pricing between regions. 

In the UK, pricing has not been adjusted for local currency changes since January 1st, 2017. Globally updating prices twice a year will ensure more consistency and predictability for organisations according to Microsoft.

Which Microsoft products are affected by the price changes?

All Microsoft Cloud products are affected, except for Azure products which are taken under a Microsoft Customer Agreement (these prices are already in dollars).

What is the price increase?

From April 1st, 2023, Microsoft’s Cloud product prices in the UK will increase by 9%. Future pricing updates will be based on exchange rate changes at the time.

Will prices always increase?

Any price changes are based on local currency changes, so, as exchange rates can move in both directions, can the pricing.

As an existing Microsoft licence customer – when will the price updates affect you?

For customers that have not yet transitioned to Microsoft’s New Commerce Experience, the pricing updates will take effect at your next annual licence anniversary after April 1st, 2023.

For NCE customers on an annual commitment, the pricing updates will only take effect at your next renewal date after April 1st, 2023. 

For NCE customers on a monthly commitment, the pricing updates will take effect on the first monthly renewal after April 1st, 2023.

Is there anything that can be done to reduce the impact of a price increase?

If your business is thinking about new product licences, consider taking out an NCE annual commitment for the new licences before April 1st to confirm that the licences are locked in at the lower rates for a full 12-month period.

Summary

No business likes to see an increase in their licence costs, but with the semi-annual pricelist reviews, in theory, there should be more predictability in terms of upcoming price changes. Fingers crossed, prices can fall too. 

This is something that Hightrees has no control over and we are not happy with the increase, especially so soon after the NCE licence changes but Microsoft is a LOT bigger than us and calls the shots as they see fit.

If you would like to discuss the impact of these Microsoft pricing changes, please get in touch and we can run through the options with you.