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Brexit Fallout: Microsoft Raising Cloud, Enterprise Software Prices in Britain

Many Microsoft cloud and on-premises customers in Britain will face price hikes effective January 1,  2017. Pundits blame the price hike on Britain’s exit from the European Union — which undermined the British pound’s value. The big question: Will additional IT companies raise cloud, software and hardware prices to offset the British pound’s weak value?

According to a Microsoft blog:

“From January, British pound prices for on-premises enterprise software will increase by 13% to realign close to euro levels.  Most enterprise cloud prices in British pounds will increase by 22% to realign close to euro levels.  Even after this adjustment, customers across the region buying in British pound will still find our cloud offerings highly competitive. For indirect sales where Microsoft products are sold through resellers, final prices and currency of sale will continue to be determined by them. In the EU/EFTA region, partners will continue to have access to prevailing prices in euro, Norwegian krone, Swiss franc, Swedish krona, and Danish krone, along with revised prices in British pounds.”

Still, some customers will benefit from price protection — including “existing orders under annuity volume licensing agreements for products that are subject to price protection,” Microsoft said. This pricing change will not apply to consumer software or consumer cloud services, the company added.

The pound has fallen more than 16% against the dollar since the Brexit vote on June 23 and has been struggling this month amid discussions on what the divorce will mean for Britain’s access to Europe’s single market, Bloomberg reported. Some experts predict UK-based IT spending will fall amid Britain’s pending exit from the European Union.

ChannelE2E is checking to see if additional SaaS and cloud providers plan to raise prices in Britain.

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