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​Microsoft to UK firms: Brexit fallout means we're hiking prices by up to 22 percent

Microsoft is planning steep price increases for on-premise software and cloud services for UK businesses because of the pound's slump after the Brexit vote.

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In January, UK organizations can expect to pay 13 percent more for Microsoft's on-premise software and 22 percent more for most of its cloud services.

Image: Getty Images/iStockphoto

Microsoft is planning significant price rises in the UK to counter the falling pound, following the country's vote to leave the European Union.

Brexit could change how tech firms do business in the UK and Europe, but its more immediate impact is showing up in higher prices for the software and services used by thousands of UK firms and government departments.

Come January, organizations using sterling can expect to pay 13 percent more for Microsoft's on-premise software and 22 percent more for most of its cloud services.

Microsoft announced the upcoming price hike on Friday as part of a plan to bring UK volume licensing prices into line with the rest of Europe.

"Effective January 1, 2017, we will be increasing British pound pricing to harmonize prices for enterprise software and cloud services within the EU/EFTA region," said Microsoft.

UK resellers and partners will also be impacted by the price rise.

"In the EU/EFTA region, partners will continue to have access to prevailing prices in euro, Norwegian krone, Swiss franc, Swedish krona, and Danish krone, along with revised prices in British pounds," Microsoft added.

The pound fell dramatically against the US dollar and the Euro following the Brexit vote on June 23. Some firms, including HP, are now reporting that the currency's decline has eaten into earnings. HP, Dell, and Apple have already raised prices in the UK.

Microsoft said it raised prices in the Norwegian krone and Swiss franc in April this year, as part of its EU pricing harmonization plan.

The price rise won't affect consumer software or consumer cloud services, according to Microsoft.

In the short term, enterprise customers that are already locked into multi-year agreements with Microsoft will be shielded from the price rise.

"For business customers, these changes will not affect existing orders under annuity volume licensing agreements for products that are subject to price protection. For example, 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," Microsoft said.

"Similarly, business customers with cloud commitment subscriptions such as Office 365 also receive price protection during their subscription term, which is normally 12 months from the start of paid subscription."

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