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Microsoft VARs irate at "knee-jerk" licensing price shift

Software giants plans could speed up UK business failure and piracy rates,
warn onlookers

By Caroline
Donnelly

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from this author

16 Feb 2012

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Microsoft VAR NCI Technologies has called on the software giant to halt work
on its plans to align its UK volume licensing pricing with the euro.

In a scathing blog post on the Cornwall-based VAR's website, the firm's managing director, Andy Trish, said the
move is ill-timed and could have dire consequences for UK plc.

With the UK teetering on the brink of another recession, he claimed the move
will accelerate business failure rates and promote piracy.

"A second recession may not be official, but look around and people are
struggling. [This is why] attending a [Microsoft] webcast [yesterday] left me
slightly stunned as to the timing of their latest announcement," he wrote.

"There are three things this is going to do for Microsoft in the UK: it is
going to speed up the process of businesses folding, promote piracy and cause
grief to the staff at Microsoft UK, who do a fantastic job, but have to follow
the company line."

Trish went on to describe Microsoft as his "favourite vendor" to deal with,
explaining that it has always responded to his concerns about the way it
operates.

"NCI may be small fry in the big world of IT, in terms of company size and
turnover, but Microsoft know if we say something is wrong, we can prove it and
normally offer a solution," he stated.

"I have no solution to their latest decision other than, 'don't do it'."

Microsoft's plans to align its volume licensing pricing with the euro were revealed
by Large Account Reseller Softcat earlier this month. The move will take effect
across all EU and European Free Trade Association countries from 1 July.

Softcat warned UK customers that they should brace themselves for
"significant" price rises if the current exchange rate does not "change
dramatically".

In his blog post, Trish said many partners have not grasped just how severe
these price hikes could be, and claimed it could lead to a "20 to 35 per cent"
rise in  Microsoft licensing costs in the UK.

"I hope additional resources are being budgeted for this in your piracy
division, Microsoft. You will need to invest in the UK," he added.

Another Microsoft partner, speaking to ChannelWeb on condition of
anonymity, backed Trish's assertions.

"It seems a ridiculous knee-jerk reaction to the European financial crisis at
the moment, and is totally disingenuous to UK partners," they said.

"A more cynical partner might take the view that [Microsoft is] doing this to
persuade more people to buy cloud services."

In a statement to ChannelWeb, Microsoft said most customers should
experience a "modest, single-digit price rise", based on recent exchange
rates.

"By establishing price consistency, Microsoft is offering clear and equitable
pricing for customers and partners. Microsoft is communicating this now to offer
our partners and business customers time to prepare for this change," said the
statement.

"Where products are sold through partners in Europe, Microsoft is unifying
its volume licensing pricing policy so that the price charged to the partner
will be based on the location of the partner's channel agreement. Partners will
continue to determine final pricing and currency of sale to
customers."

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Do
you agree?

Add
your comment

Pre-owned software licensing will offset the £:€ price hikes...

Companies should not be concerned about aligning sterling prices with the
euro when there are Microsoft volume licence suppliers around that can supply
discounted Microsoft volume licences through the secondary software licensing
market for Open, Select and Enterprise. The market has been around since
2005.

Visit this website (www.discount-licensing.com) where you will see their
prices range between 20% to 90% below the current market prices and so any
£sterling price hike will be more offset by such secondary suppliers.

Posted by Nathan | 16 Feb 2012

Microsoft price inconsistencies

The recent price increase in the UK announced for July 2012 does bring the
GBP£ in line with the EURO. If Microsoft is keen to bring price consistencies,
then this should be looked at a global level. A concern I have for for the UK
economy is that global customers may wish to procure overseas with the upcoming
price hike in the UK.

Antony Attfield
Practice lead - Software Procurement Consultancy

Trustmarque

Posted by Antony Attfield | 16 Feb 2012

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