On 5 January 2023, Microsoft announced that it’s taking steps to align the global pricing of Microsoft Cloud products to maintain consistent pricing for its customers based on the exchange rate of their local currency to the US dollars (USD).
Microsoft also clarified that it would assess and evaluate local currency pricing twice a year based on currency fluctuations relative to the USD. With this, it wants to create a centralised process and a simplified structure for better transparency, consistency, and predictability of local pricing adjustments for its customers worldwide.
The world’s current macroeconomic situation has affected several countries’ currencies and, thus, their exchange rates with the USD. So, inevitably, Microsoft is realigning its could pricing globally from 1 April 2023, which is the first of this bi-annual price alignment.
By how much will the price change?
Microsoft is updating local currency cloud pricing in the euro (EUR), the British pound sterling (GBP), the Swedish krona (SEK), the Norwegian krone (NOK) and the Danish krone (DKK).
These are the adjustment for all cloud licenses:
- British Pound (GBP) prices will adjust by +9%
- Danish Krone (DKK), Euro (EUR) and Norwegian Krone (NOK), prices will adjust by +11%
- Swedish Krona (SEK) prices will adjust by +15%
Who will be impacted by the price increases?
All Microsoft customers in all industries!
Microsoft has taken a unified approach to the price adjustment, which will be equally come in effect for all commercial and public sector customers, including government, academic and non-profit organisations.
But there are some prices that will be protected!
What prices are not impacted?
The price adjustment comes into effect on 1 April 2023. So, rule of thumb: It applies to all new customers and also all existing customers with a renewal date after 1 April 2023. But here are more details.
1. New Commerce CSP online services
If you have an existing subscription active before 1 April 2023 for seat-based cloud services, you are protected, during your subscription period, at your original billing price. You can also add more licences to your existing subscription at the original price. The price adjustments apply only after your next subscription renewal.
2. New Commerce CSP Azure
As for customers licensing Azure through New Commerce CSP, which is already billed in the USD, this new Microsoft pricing alignment will not have any impact. Your prices are automatically calculated monthly, considering the fluctuating USD exchange rates.
3. Enterprise Agreements (EA)
If you’re an existing EA customer with ongoing subscriptions of Microsoft Cloud services, including Microsoft Office 365 and Azure, you will be protected on all your previously ordered products during your current agreement term. You can add new product additions at the current price list. Also, renewals and new agreements pricing will be based on the price list at the time of your order.
4. On-premise Microsoft solutions
This price adjustment does not cover on-premise pricing, consumer prices, and hardware and OEM (Original Equipment Manufacturer) costs.
5. Indirect purchases
If you’re purchasing your Microsoft Cloud services indirectly from a technology partner, they may determine the final prices and currency of payment for your solution. Please check with your local software vendors for further details. Alternately, you could get in touch with one of our Microsoft experts for some trusted advice for your fluid Microsoft Cloud transformation.
|What prices are impacted?
|What prices are NOT impacted?
|Only new or renewing Microsoft cloud licences after 1 April 2023 will adjust to the new price alignment.
|Azure in Microsoft Customer Agreement is already billed in the USD with monthly updated billing exchange rates, and, thus, will not have any impact from the new price change.
|The existing orders under commercial licensing agreements that are subject to price protection will not be affected by this price adjustment.
|Clients with on-premise solutions will have the same pricing for their users and hardware as well as their original equipment manufacturer (OEM) costs.
|As for indirect sales, final prices and currency of sale will lie on the discretion of the resellers.
What we recommend
As your trusted advisors, we know that Microsoft price adjustments like these can raise queries and uncertainty. But our in-house Microsoft licensing experts are available for you to discuss your short and long-term strategies. This way, you can help your business not just mitigate the impact of this price alignment but also leverage the limited window of opportunity to lock your prices at the current rate before April 2023.
We are Microsoft Gold partners and, hence, have access to our client’s best CSP commercial terms. If you want to discuss how this price change impacts your business, talk to our experts for trusted advice.