IMPORTANT Microsoft Announcement: FX Rate Changes that will affect Microsoft CSP Prices
After Microsoft dropped the new FX rate increase,we wanted to share more information and how it will impact you.
Starting April 1, 2023, the following adjustment will be effective for Microsoft Cloud services:
Currencies globally have been impacted differently by the macroeconomic environment, which also affected their exchange rate compared to the US dollar. For a sustained period, Microsoft had deferred pricing adjustments based on such currency fluctuations, but as of April 1, 2023, Microsoft is realigning Cloud pricing globally.
This means Microsoft are updating local currency cloud pricing in EUR, GBP, SEK, NOK and DKK based on foreign currency fluctuations compared to the US dollar (USD) to have greater price harmonization for our cloud products across the globe. This will ensure that customers worldwide have more closely aligned pricing compared to the USD rate. Note that customers who license Azure under a Microsoft Customer Agreement on New Commerce have pricing in US dollars worldwide and will not be affected by the local currency-based price changes.
British Pound (GBP) prices will adjust +9%
Danish Krone (DKK), Euro (EUR) and Norwegian Krone (NOK), prices will adjust +11%
Swedish Krona (SEK) prices will adjust +15%
The two key component areas are as follows:
- Azure transacted through a Microsoft CSP partner under the current new commerce experience (ie not legacy CSP) which is under a Microsoft Customer Agreement is not affected by the local currency increase.
- This is because partners are charged in US Dollars for customers’ Azure consumption which is then converted to the local currency (dependent on customer’s account location) using a monthly variable foreign exchange rate mechanism and the partners invoice their customers accordingly.
- Customers transacting directly with Microsoft for consumption through Azure.com, in UK and EU currency locations, will see prices increase on 1st April 2023.
- Enterprise Agreement (EA) customers receive price protection up to a baseline price point for the duration of their agreement. Pricing may therefore increase for some EA customers but only up to and not above the baseline price point stated within their agreement.
- Azure Commitment Discount (ACD) customers in the UK and EU currency locations will see prices increase, but not above their baseline price protection.
- Because ACD is a fixed discount and does not affect the baseline price, customers will continue to receive the discount percentage specified in their contract and will be applied to the current month’s EA list price.
Microsoft end user subscriptions:
- For customers purchasing Microsoft end user subscriptions through a Microsoft Cloud Solution Provider (CSP) under the new commerce experience (the Microsoft Customer Agreement) are price-protected for the duration of each subscription, whether this is monthly, annually or tri-annually (where / when applicable).
- Therefore, any monthly-committed subscriptions will increase in price from 1st April 2023.
- Any new product subscriptions (monthly, annual or tri-annual terms) added or renewed after 1st April 2023 will be charged at a higher (per subscription) price when compared to today’s prices.
These adjustments will not affect existing orders under licensing agreements for products that are subject to price protection. However, prices for new product additions under such licensing agreements and purchases under new contracts will be as defined by the pricelist at the time of order.
Moving forward, Microsoft will establish a centralised process in which currency fluctuations and potential pricing adjustments relative to the USD will be assessed and evaluated twice a year. This simplified structure will provide better transparency and predictability for customers no matter where they are based and move to a consistent pricing model that is the most common in our industry.
We have been assured that Microsoft remains deeply committed to the success of its customers and partners. They have said they will continue to invest to enable customers such as you to innovate, to consolidate and to eliminate operating costs, optimize your business performance and efficiency with automation and AI to maximize your digital investments, and provide the foundation for a strong security strategy.
If you want to price protect your monthly committed plan, Outbound can help you save on the increase by moving over to us and committing to an annual term. If you would like to understand how and would like more information, please reach out to our sales team on firstname.lastname@example.org
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