Microsoft increase Cloud Services pricing inline with Global Pricing and FX

In what Microsoft call “price harmonisation”, it has been confirmed that Microsoft will be aligning the pricing of their Cloud products and services (for example Microsoft 365) by introducing consistent global pricing for its services across the globe. For many regions, such as the UK and EU, this means price rises as the dollar has continued to fall in recent years again the Euro and Pound.

What and why are prices changing?

Microsoft are aligning costs (like they do today with Azure) to US dollar FX rates which means that customers will have consistent pricing reflected by the exchange rate of the local currency to the US dollar (USD), which is reviewed twice a year.

While a price increase is never well received, it is worth noting that this latest increase relates to their commercial cloud products such as Microsoft 365. Azure is already priced by on regional FX rates and is not affected by this announcement. Microsoft are simply aligning their commercial pricing in line with their competition and their other cloud services.

Countries that use the Great British Pound (GBP), the Danish Krone (DKK), the Euro (EUR), the Norwegian Krone (NOK), and the Swedish Krona (SEK) will all see a price increase from April 1, 2023.

“In the future, Microsoft will assess pricing in local currency as part of a regular twice-a-year cadence, taking into consideration currency fluctuations relative to the USD.

This will provide increased transparency and predictability for customers globally and move to a pricing model that is most common in our industry.

The Microsoft Cloud continues to be priced competitively, and Microsoft remains deeply committed to the success of its customers and partners.”

Microsoft

How much are prices increasing by?

Microsoft has confirmed that the price increase for the following currencies will be:

  • GBP: +9%
  • DKK, EUR and NOK: +11%
  • SEK: +15%

Microsoft have said they are committed to continuing to invest in their cloud services to “enable customers to innovate, consolidate and eliminate operating costs”.

Thoughts and Actions

While a price increase is never well received, it is worth noting that this latest increase relates to their commercial cloud products such as Microsoft 365. Azure is already priced by on regional FX rates and is not affected by this announcement. Microsoft are simply aligning their commercial pricing in line with their competition and their other cloud services.

This therefore represents a good time for organisations to do some “house keeping” to keep licenses and costs in check. For example:

  • Check 3rd party duplicate products you can displace (and use the services included in your Microsoft 365 subscription)
  • Check if you need the tier of license you are using. Would Microsoft 365 E3 deliver what you need? Do you need the same licenses for everyone?
  • Ensure you leverage Fast Track services or your partner to help you adopt and get best value of your investment in Microsoft Cloud
  • Speak to your licensing provider or Cloud Solution Provider to ensure you get the best commercial costs

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