Microsoft Raises UK Prices By a Third and Can't Rule Out Future Hikes

New submitter DerekduPreez writes "Microsoft has revealed that it will increase volume licencing prices in the UK by an average of 29 percent to adjust for the 'sustained currency differences between European countries'. UK businesses have until 1st July to place their orders under the current prices before the changes take effect. Microsoft claims that because of sustained differences between the British Pound and the Euro, price spikes are necessary to maintain consistency across the region. Microsoft also confirmed that it could not rule out future increases, as it will continue to monitor currency movements and may make further adjustments if there are large fluctuations."

Re:The British are proud of their Pound

[CriticalAnalysis]

Exactly this. Euro is pretty much where it has always been. Pound is losing its value. Microsoft has every right to do it. Compared to Google they just have to do it openly - even Google has been steadily rising their advertising for the UK because of differences in currency values. They just do it silently behind the scenes.

Re:The British are proud of their Pound

[PremiumCarrion]

The graph you linked shows the opposite of that.

Re:The British are proud of their Pound

[Dunbal]

You need $1.61 to buy a pound today, when yesterday you needed $1.55 to buy the same pound. That is a weakening dollar (or a strengthening pound) and not the opposite.

It is British Pound against Euro

[SYSS Mouse]

This price increase is a measure against http://en.wikipedia.org/wiki/Grey_market [wikipedia.org]

Two years ago 1 Pound = 1.5 Euro, now it is 1.3 Euro. http://finance.yahoo.com/echarts?s=GBPEUR%3DX [yahoo.com]
  MS is increasing the price in GB so that M$ price is around the same in Europe zone.

Re:The British are proud of their Pound

[marcosdumay]

That's the nicest thing about Google's business model. They don't have to raise their prices, as the prices are "automaticaly" set by their clients on bids.

Re:The British are proud of their Pound

[jalopezp]

The pound sterling may be doing worse than it ever has, but it's certainly faring better than the euro. View the last year's trend from yahoo! [yahoo.com]

Re:The British are proud of their Pound

[DrgnDancer]

Since yesterday. I'm talking long term trends. You can't look at 24 hours and say the dollar is weakening. As little as a year ago it was more like $2 to the Pound. There were variations even then, but "in general" the dollar has been getting much stronger lately. Right now we're approximately where were against European currencies before the recession. For quite a while we were 25-50% lower than we were pre-recession.

Re:The British are proud of their Pound

[chrb]

The Euro is going down against the Pound, not vice versa.

EUR vs GBP 1992-2012 [reuters.com]. Whether it is up or down depends on the dates you measure from and to. Nobody knows what will happen in the future.

There is less justification for this price hike than there has been at pretty much any time since late 2008.

For the last few years the pounds has been down on the euro in contrast to the preceding decade. Most large corporations don't regularly change end-user prices to track currency variations, unless they are in the currency or oil/gas business. It is entirely possible that Microsoft was willing to absorb a lower profit margin in the UK relative to other countries for a few years, but now predict that the weaker pound is a long term trend for the next decade, and are resetting prices accordingly. It is also possible that the Microsoft accountants believe that the UK market is more willing to bear higher profit margins.