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Microsoft to hike prices by 22% in the UK due to financial uncertainty over Brexit

Since summer of this year, the outcome of the Brexit vote has resulted in a considerable amount of financial uncertainty in the UK. The government has not yet reached a decision on the road ahead after it invokes Article 50, which will effectively trigger an exit from the European Union. But some major tech companies have already moved to cushion the impact of the falling pound, and are raising their prices.

Britain’s shock vote on June 23 set the ball rolling for the biggest one-day fall in sterling against the dollar, with the pound now down 18 percent against the U.S. currency. It prompted computer makers such as Apple, Dell and others to increase prices in Britain. In a recent blog post, Microsoft shared that it will soon be one of the companies that amend their prices, and it also confirmed that from January 1st, 2017, business software pricing will rise by 13 percent and cloud services will see a 22 percent increase.

Microsoft’s changes are part of a necessary periodic assessment of its local pricing “to ensure there is reasonable alignment across the region.” As a result of the fall in the value of the pound, Apple hiked hardware prices in September, although the Redmond company says that consumer software like Office 365 and cloud services will not be impacted. However, because Microsoft doesn’t set the pricing offered by re-sellers, partners could still decide to implement their own increases.

As for customers with existing agreements, they will most likely be protected from Microsoft’s price hikes until they renew their subscription. According to their blog post,

Customers with Enterprise Agreements have price protection on previously ordered enterprise software and cloud services, and will not experience a price change during the term of their agreement. Similarly, business customers with cloud commitment subscriptions such as Office 365 also receive price protection during their subscription term, which is normally twelve months from the start of paid subscription.

A spokeswoman for the British Cabinet Office, which supports the overall running of government including the management of major contracts, said it would ensure the best prices for taxpayers. Quoted on Reuters, she went on to add,

Where we are made aware of proposed price changes for a specific supplier we will work closely with that supplier to identify ways to mitigate any increases in price.

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