Microsoft exempts UK public sector from 25 per cent price hike

By Graeme Burton
04 May 2012 View Comments
Microsoft campus in Redmond

Microsoft claims that it will exempt the UK public sector from summer volume licencing hikes intended to synchronise UK prices with the rest of Europe.

The increases will see organisations paying between 7.5 per cent and 33.4 per cent more for Microsoft licences, depending on their agreements – with the average price hike around 25 per cent.

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The adjustments are being made as a result of the devaluation of pound sterling in recent years, which has left UK prices looking cheap in comparison to prices prevailing in the eurozone. The new prices will take effect from July 2012.

The public sector will be exempt from these increases for the time being, as pricing remains based on the Public Sector Agreements of 2009, which the Cabinet Office persuaded Microsoft to discount by a further 16 per cent in December 2011.

Forrester Research analyst Duncan Jones described the move by Microsoft as "reasonable". He pointed out that existing Enterprise Agreement and Software Assurance contracts will be unaffected until renewal, when the new pricing will kick in, unless renewals are due before 1 July.

Jones also recommended that organisations considering Select agreements with Microsoft ought to bring forward purchases planned for this year to take advantage of current low prices – perhaps even wringing an even bigger discount out of the software giant bearing in mind Microsoft's financial year-end in June.

At the same time, the company is cutting pricing in Swiss francs by a similar percentage in order to reflect the increase in value of the Swiss currency. Microsoft said it plans to act to keep its foreign (non-US-dollar) pricing aligned on a regular basis in future.

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