What the changes to Microsoft Cloud local currency pricing mean

The cost-of-living crisis is affecting businesses as well as individuals and consistent price increases are becoming the norm now and into 2023.

Microsoft have announced changes to local currency pricing in response to exchange rates which continue to fluctuate.

What are the pricing changes?

From April 2023, Microsoft will implement a defined and transparent cadence to align Microsoft Cloud pricing across regions.

For the UK this means that starting April 1, 2023, the following adjustment will be effective for Microsoft Cloud services:

British Pound (GBP) prices will adjust +9%

These adjustments will not affect existing orders under licensing agreements for products that are subject to price protection. However, prices for new product additions under such licensing agreements and purchases under new contracts will be as defined by the pricelist at the time of order.

The below statement from Microsoft along with their answers to some FAQs, will help provide some context:

“Microsoft is deeply committed to the success of its customers and partners. in light of the changing economic environment and other world events, we have deferred pricing adjustments based on currency fluctuations thus far. however, after a sustained period of lower local currency Microsoft cloud pricing in many regions of the world, we’re now beginning a process to realign our prices globally.”

What is the change being made?

Beginning in 2023, Microsoft will implement a more defined and transparent cadence to provide better Commercial Cloud pricing alignment across regions. Partners and customers with pricing in local currencies will be able to plan for pricing alignment to USD and global parity at semi-annual intervals, subject to market conditions.

Why does Microsoft adjust prices due to foreign exchange?

Cloud services can be purchased globally and many of Microsoft’s competitors price in USD globally. Their pricing updates are based on local currency fluctuations and other factors to ensure global consistency in their pricing.

Does this mean that my pricing will be changing all the time?

Moving forward, Microsoft will establish a centralized process in which currency fluctuations and potential pricing adjustments relative to the USD will be assessed and evaluated twice a year. This simplified structure will provide better transparency and predictability for customers no matter where they are based and move to a consistent pricing model that is the most common in our industry.

Get in touch

If you are one of our customers and want to discuss this or find out more, please contact your Technical Account Manager. If you’re not a customer (yet!) email us at hello@select-technology.co.uk and we’ll be happy to help.