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Microsoft to up UK prices after pound plunges

Monday, October 24, 2016 - 01:44

Microsoft plans to increase prices for some enterprise services by up to 22 percent in Britain following the plunge in the pound. As Sonia Legg reports, it's likely to hit thousands of companies and government departments who rely on its cloud and software products.

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It's not the first tech giant to raise prices in Britain - Apple and Dell among others - already have. And if sterling stays around current levels it may not be the last. But some aren't impressed with Microsoft's decision to increase the price of icloud services from January by 22 percent and enterprise software by 13 percent. (SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "I think they are being rather disingenuous and advantageous in fairness. Yes the currency has moved but it's not come as a great surprise to anyone that there has been volatility in sterling exchange rates before and after the Brexit result. Microsoft is a multi-national company, they could have easily hedged their currency flows." Microsoft has turned its focus from Windows to mobile and cloud computing in recent years Storing, managing and processing data for thousands of companies and public sector providers. It says it won't change the prices on consumer services or existing orders. But they could suffer eventually if the price hikes are passed on. (SOUNDBITE) (English): DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "It will be interesting to see how the UK consumer responds. Will they vote with their feet and move to other services, provided by the likes of Google and other software providers or will they bite the bullet and pay up?" It's not just the tech sector feeling the impact of sterling's fall. Earlier this month Britain's biggest supermarket Tesco clashed with supplier Unilever, briefly pulling popular goods such as Marmite from its website. Nestle has also said it's looking at all options to deal with the problem. There may be some advantages for the UK economy. The Bank of England has long been targetting a 2 percent inflation rate. The problem comes when it reaches that and doesn't stop.