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Microsoft Raises UK Prices By a Third and Can't Rule Out Future Hikes
New submitter DerekduPreez writes "Microsoft has revealed that it will increase volume licencing prices in the UK by an average of 29 percent to adjust for the 'sustained currency differences between European countries'. UK businesses have until 1st July to place their orders under the current prices before the changes take effect. Microsoft claims that because of sustained differences between the British Pound and the Euro, price spikes are necessary to maintain consistency across the region. Microsoft also confirmed that it could not rule out future increases, as it will continue to monitor currency movements and may make further adjustments if there are large fluctuations."
They even advertise "no Euros" as an advantage to staying in the country 2012. It's a pity they can't play with the other kids.
Will they lower their UK prices in that case? Or will they just raise euro prices to compensate?
It's worse than you think, the majority of licensing are only increasing by 20-25% while Open Value is going up by 33.5%, which is presumably where the 1/3 figure comes from, so the "average" quoted isn't even representative of the actual changes.
from an already vulnerable economy. Maybe this will finally spur open source platforms such as Linux.
-- By all means let's be open-minded, but not so open-minded that our brains drop out.
Exchange rates are a matter of public record. The pound has been gradually strengthening NOT WEAKENING against the euro for the last year and is now at a three year high.
There is only one reason for this:
Because they can.
Micro$oft, don't insult our intelligence by being such a bare faced liar.
Got yea by the balls, now pay up or sing soprano.
Questions raise, answers kill. Raise questions to stay alive.
So, M$ are urging people to order, respectively buy Win7's 'till 1st of July, so they can release Win8 in August...
Nice!
This is a pretty obscure outcome of the recent Quantitative Easing of the Fed and the Bank of England, and a little confusing as Microsoft is a US company.
You have to remember that Microsoft's main European headquarters is in Dublin in Ireland, and hence operates in Euros. The quantitative easing of the pound means that the UK goods become cheaper to export, and that conversely, it becomes more expensive for UK-ians to import good from abroad. In this case, it has become 33% more expensive for them to import MS software from Ireland.
Which raises the question: Why should Microsoft continue to choose Dublin as their main European base of operations if this is the kind of price hikes they will be forced to impose on perhaps their single largest European market? Low corporation tax rates? Not if that treaty gets passed sunshine.
This is less a problem for Microsoft--who can move around--than it is for Ireland, which is rapidly becoming unattractive to high tech industries who, due to the falling US and UK currencies, are seeing their costs soar in Dublin. (By the way, this is occurring in the midst of a period of debt induced stagflation in Ireland as well.) The problem is only going to get worse the longer the ECB and Bundesbank keep putting their banking system before the citizens of the continent.
Microsoft aren't stupid, and as long as they can have a low cost, english speaking centre, with a currency pegged or floating steadily alongside Sterling, they will stay in Dublin. If they can only get an expensive, high tax centre pegged to the Deutschmark, they'll just move to London, or York, or whatever. The same goes for all the other high tech industries in Ireland. Vint Cerf's words this week explain that Ireland still has potential, despite government indifference towards the IT sector; but I don't think it has any under the euro.
This is just yet another economic case study which convinces me that Ireland needs to vote No on the 31st of this month, get the hell out of the Euro as fast as possible, and balance its budget in one fell swoop THIS YEAR. No more excuses.
(P.S. I believe in the EU, not the Euro.)
May the Maths Be with you!
Human-speak recognizes 1/2, 1/3, 2/3, 1/4, 3/4 and maybe 1/5, 2/5, 3/5, and 4/5. Once you go beyond that, the normal human brain will have to think for a period of time.
So the nearby choices are 50%, 33%, 25%, or 20%. In the interest of extra dramatization, it was the one higher that was picked. 1/3.
Where would you draw the line? Would you use two-seventh?
Are their any good online resources for rolling out Linux clients on a Windows domain? Mint, Ubuntu, Fedora, anything... I'm not particular familiar with any distro, so learning to administer any of them would be of benefit. I've no real need to use MS products in my environment, and am just aching for an excuse to switch.
Maybe by the time the switch is complete, OD will match AD in functionality. Win-win.
Finally had enough. Come see us over at https://soylentnews.org/
For the pedantic, the new headline should read:
Microsoft Raises UK Prices by 29 100ths, and oPless and Spad Can Now Go Back To Rearranging The Cutlery Drawer
you're welcome,
Pray I don't alter it further.
What does the relationship between the Euro and the Pound have to a supplier based in the USA who trades in dollars ?
Looking at http://www.x-rates.com/d/GBP/USD/graph120.html , the pound has been very close to the dollar for quite a while now. They're both weakening on the global markets, but they're keeping pretty good pace with each other.
Microsoft is widely misunderstood. People think Microsoft is a software company that is sometimes abusive. That's wrong. Microsoft is an abuse company that uses software to deliver abuse.
Just my opinion, but I'm not the only one who thinks that way.
Microsoft Exec 1: Our fiscal year is ending on June 30 and our revenue is barely larger than it was last year! What can we do to get more money?
Microsoft Exec 2: We could raise the price of our most successful product!
Microsoft Exec 1: I don't know - then we risk people switching over to Macs or Linux.
Microsoft Exec 3: What if we raise the price of Windows in just a single country?!
Microsoft Exec 1: I love it! The only question is which country should we raise the price? Which country has been the biggest thorn in our side and at the same time has the capital to afford a higher price?
Microsoft Exec 2: Well, it has to be somewhere in Europe. The EU has been more stringent about our aggressive business tactics than any other organization.
Microsoft Exec 3: And England is one of the more financially sound countries in the EU!
Microsoft Exec 1: Gentlemen, we've found our mark! Prepare your finest strippers and coke!
Over here we buy our licenses in USD. Why the inconsistency?
Starbucks, Harbuckle of Breath.
Well, it's always been $1 = £1
So now it's €1 = £1 as well.
try to make ends meet, you're a slave to money, then you die
This price increase is a measure against http://en.wikipedia.org/wiki/Grey_market
Two years ago 1 Pound = 1.5 Euro, now it is 1.3 Euro. http://finance.yahoo.com/echarts?s=GBPEUR%3DX
MS is increasing the price in GB so that M$ price is around the same in Europe zone.
It's all fun and games until someone needs to use a package that runs on windows only. Old stuff can probably be emulated (though I've had pretty mixed success with even simple programs in Oracle VMs), but the killers are the commercial packages which run only on windows and are absolute resource hogs. I suspect there are some in many industries, but it mine - structural engineering - AutoCAD is about the only game in town for archtiectural products, and many (if not most) of the analysis programs are Win only. All struggle to run in a native OS on the most modern hardware. Part of it is lazy-ass programming (I'm talking to you, AutoDesk), and part of it is just computational limits. If we're willing to go back to running a model and going out for a 2-3 hours lunch, or prepping models ahead of time to queue up to run after hours, it's an option, but an inefficient one.
There's also the issue of re-training. Never underestimate the inability for (or inefficiency in) people to learn a new OS paradigm. An extra £30 pales in comparison to the personnel cost of a half-day class to get everyone up to speed.
Is it just my observation, or are there way too many stupid people in the world?
And the latest opportunity of the FSF to urge the British masses to embrace free software now arrives. Maybe come out with a new version of GNU called HMOS - Her Majesty's Operating System
but as long as Microsoft knows they can keep obsoleting old versions of their software and forcing upgrades and repurchases of licenses their long term income remains. It's been referred to as the Microsoft treadmill and it has sustained them for well over a decade. How else could they have 90% market share and continue pulling in billions in profits quarter after quarter?
It is getting tougher for MS though with OSS and raising their prices just makes that worst. If we read about them doing another corporate reorganization then it might be MS is digging for ways to continue showing growth in their financial reports.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Microsoft is not selling a finite resource. It's selling virtual copies and IP blabla. Unless the UK have special demands to tweak their OS, Office that needs to be done outside UK there is no need to adjust price acording to exchange parity. Services costs will increase only if they are offshore (maybe the rupee is increasing or the wages in India). Microsoft and the rest are not selling at a well defined price (production cost + x% profit) they are selling at the biggest price somebody is willing to pay. Seems that UK is willing to pay or somebody is thinking so from his sky high office with his helicopter view over the things.
Volume licensing like this covers all versions. A desktop enterprise licensing can be 98, 2000, XP, Vista, 7 or 8, same for server enterprise licensing. You can license based on perpetual intance of a version, but then you can't go to the next version without a new purchase. The treadmill still applies as you have to keep paying each year for this right.
Trying to become famous by taking photos. Visit my homepage please.
The problem is that USians say "England" and "English" when they mean Britain and British.
It's great fun calling New Yorkers "Mexicans" - they're all Americans, right? Same thing, right? And it's not like they can do anything like it - unlike people in the UK, New Yorkers aren't allowed to own guns...
Looking at the currency conversion chart over the last 5 years (note axis doesn't start at 0) you can see that MS is getting less dollar or Euro for each £1 GBP in income. The chart appears to show an initially fairly steady exchange giving, for every £1, around abouts $2 or €1.30, which has since dropped to around $1.60 (down 25%) or €1.20 (down 8%).
Now look at the second chart on that link. We can see that over the 10 year period the 8% drop in the amount of Euros being obtained for £1 GBP does look like a sustained currency difference. MS presumably has some European division, probably the one in low-tax Ireland, looking at their figures and sure enough UK sales are looking down over the long term due to currency fluctuations.
Do I buy that? Nope. MS is a US company and all financial reporting that matters is in USD. I'd bet even all internal reporting that matters is in USD, so I doubt this is some internal bureaucracy mishap. Looking at both charts combined, i.e. 2002 - 2012, the pound has been up for a while but now back around where it was. Keep going back if you like, the interactive chart is here. $1.60 for a £1 looks to be about the typical value.
Price rises are justified by unfavourable exchange rate movements. Prices increase in UK because of Stirling:Euro, prices rise in Europe because of Euro:dollar. It's always one way. They're never justifying a price cut on the back of favourable movements. I'm not just cynical about MS specifically, it's quarterly reporting. Gains are considered favourably for the quarter but then basically considered in the bank and there's a new baseline for next quarter. They're never really considered temporary, soon as it falls back it's a problem that needs addressed.
While I'm here I'll note the low value of the pound is largely an intentional effort by the government to entice foreign investment.
I should also note that what TFA should really have done is taken the actual pricing faced by customers in each area and made the comparison. It's possible the UK price was discounted all along (very surprising and against the norm if so however). For whatever reason, they didn't, and I don't have that info to provide it myself.
By that logic we wouldn't need a price gouging inquiry in Australia.
The $AU has been at parity with the $US or above for years now - but Australians are still paying massively over the top prices compared to their American counterparts.