UK firms will not be affected by Microsoft Azure price hikes

Microsoft Azurecustomers in Europe will be charged more from 1 August, but this will not include the UK, the company has confirmed.

It is understood that European customers will pay 13 percent more for Azure to “more closely align with prices in most markets”, according to an email circulated to users during the week, which was published on IT blogger's Aidan Finn's site.

The original email is alleged to have said customers who hold Enterprise Agreements, Enterprise Subscription Agreements (EAS), Server and Cloud Enrollments have price protection.

In a statement sent to ComputerworldUK Microsoft confirmed only new or renewing contracts will be affected.

Australian customers will also be subject to hikes of 26 percent, again, to “more closely align with prices in most markets”, Finn revealed.

He added: “One has to wonder about the motivation of the hikes. Local costs have not increased by this amount. In Europe, power costs have come down and Microsoft already owns the land around North Europe (not hard to find even if I cannot say where it is). If anything, local costs have probably reduced. This would appear to be a bottom line operation to restore profits in the ledger for shareholders to see. As I said in the original post – not unexpected because The Euro has gone from $1.35 to $1.11.”

A spokesperson for Microsoft said: “Microsoft periodically assesses our pricing to ensure there is reasonable alignment with the market. In light of the rapid evolution of the market for cloud services and evolving local dynamics, we can confirm that as of August 1 2015, we will adjust prices for most enterprise cloud products within the EU/EFTA region. The UK is unaffected by these adjustments. The changes will not affect existing annuity volume licensing agreements but will apply to most enterprise cloud products under new or renewing contracts.”

It appears that 365 customers, not on the Pro Plus model will also start to pay more, according to Finn.

In other news, Microsoft is planning round of layoffs that could affect its hardware and smartphones businesses, according to The New York Times. Numbers have not been confirmed but they will be in addition to the 18,000 staff it said it would let go last year.

Rival cloud firm, Interoute yesterday said it was "surprised" by the price changes and had no plans to increase its costs for customers. CTO Matthew Finnie said: "The news that Microsoft is raising prices of Azure in Europe from 1st August is surprising given the substantial demand from businesses here for Cloud services.

"These businesses should be aware that US providers are not the only port of call here and these price rises make a stronger case for working with local European partners with a global reach – particularly as businesses look to optimise their engagement with the market and suppliers.

“Interoute is not raising its prices because of fluctuating currencies as it's a European native."

Copyright © 2015 IDG Communications, Inc.

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