Microsoft will increase the prices it charges British businesses by up to 22% to account for the slump in the value of the pound following the EU referendum result, the software company has announced.
The new prices, which will come into effect in January 2017, see the amounts expected for locally hosted software increase by 13%, while “most” cloud-hosted services will increase by the full 22%, the company said in a statement. While once programs like Microsoft’s Office suite were installed locally on PCs, in recent years the cloud-based subscription version, Office 365, has become increasingly popular.
“We periodically assess the impact of local pricing of our products and services to ensure there is reasonable alignment across the region and this change is an outcome of this assessment,” Microsoft said. “These changes are similar to the recent harmonisation adjustments to pricing in Norwegian krone and Swiss franc we made in April 2016.”
Business customers will only see the price changes if they buy directly from Microsoft, but third-party resellers are likely to increase their own prices to match the headline increase.
Among the software expected to see a price rise is Microsoft’s Office suite of productivity tools including Word, Powerpoint and Outlook, as well as its Office 365 cloud platform. But the price rise will only apply to new purchases, not ongoing contracts, delaying the blow for many businesses and organisations which currently use Microsoft technology.
While Microsoft is one of the first major technology firms to announce such a large price increase for British customers following the collapse of the pound, other businesses have managed to avoid the announcements while still effectively increasing prices.
Amazon, for instance, charges all its Amazon Web Services customers prices denominated in US dollars. Although customers, who include Netflix, Spotify and the Guardian, can opt to pay the bills in local currency, the fees are still determined according to the US dollar exchange rate at the end of each billing month.
Apple managed to smuggle in a price rise of its own when it announced new iPhones and boosted the storage available on iPads. The new phones cost 11% to 15% more than the devices they were replacing. The cheapest iPhone 6s, for instance, was £539, while its successor is £599. The iPad Air 2 used to start at £349, but now costs £379. Although the new version has more storage, in the US, that increase was offered with no change to the bottom line.
Similar increases are expected when the company announces updates to its Mac line of personal computers on 27 October.