Starting 1st April 2023, pricing for Microsoft Cloud products will be adjusted by +9% in GBP. Why is this and what do you need to know to be prepared for the pricing update?

What is happening?

In January, Microsoft announced it was updating the pricing of its Microsoft Cloud products across certain currencies. The impacted currencies are GBP, DKK, EUR, NOK and SEK.

Commencing from the 1st April 2023, pricing for Microsoft Cloud products will be adjusted by the following amount:

  • GBP: +9%
  • DKK, EUR and NOK: +11%
  • SEK: +15%

Why is Microsoft increasing prices?

Like many organisations, Microsoft has deferred pricing adjustments as a result of currency fluctuations for some time now. The pricing changes are part of Microsoft’s steps to better align the pricing of Microsoft Cloud products globally. The new pricing will allow all customers to have consistent pricing which reflects the exchange rate of their local currency in relation to the US dollar.

What does this mean for me?

Customers with existing long-term subscription renewals which are due before the 1st of April 2023 will not be impacted this year. The same stands for customers who add any additional licences to those subscriptions.

Likewise, organisations currently on month-to-month pricing can avoid the price increase for up to one year by renewing or committing to a 12 month term before the 1st of April 2023.

However, there is no avoiding the inevitable, regardless of your partner. Customers who take out new subscriptions on or after the 1st of April 2023, will be subject to the new prices. Equally, customers who renew before 1st of April 2023, will be subject to the new prices when their next renewal takes place.

For customers who license Azure, please see our article on this topic.

Bi-annual Microsoft Cloud pricing reviews

Going forward, Microsoft “will assess pricing in local currency as part of a regular twice a year cadence, taking into consideration currency fluctuations relative to the USD.” In order to “provide increased transparency and predictability for customers globally and move to a pricing model that is most common in our industry.”

With this being the first global price alignment, there is a big gap between certain local currencies and the dollar. Moving forward, with Microsoft’s bi-annual adjustments we can expect to see less dramatic increases than this change (notwithstanding any major global events which may impact exchange rates).

Although a pricing increase is never a welcome change and may be disappointing and/or a concern for some customers, the Microsoft Cloud offers unparalleled flexibility, allowing businesses to quickly and easily scale up or down licences as required. In addition, the benefits of moving to the cloud offer organisations a whole host of opportunities to do more with less.

Further support

We are committed to helping our customers navigate the pricing update and minimise any disruption to your organisation. For support on what the pricing update means specifically for your organisation, or for help optimising the cost of your Microsoft Cloud licenses, please contact us today to speak to one of our experts.