Microsoft VARs irate at "knee-jerk" licensing price shift

Software giants plans could speed up UK business failure and piracy rates, warn onlookers

Microsoft VAR NCI Technologies has called on the software giant to halt work on its plans to align its UK volume licensing pricing with the euro.

In a scathing blog post on the Cornwall-based VAR's website, the firm's managing director, Andy Trish, said the move is ill-timed and could have dire consequences for UK plc.

With the UK teetering on the brink of another recession, he claimed the move will accelerate business failure rates and promote piracy.

"A second recession may not be official, but look around and people are struggling. [This is why] attending a [Microsoft] webcast [yesterday] left me slightly stunned as to the timing of their latest announcement," he wrote.

"There are three things this is going to do for Microsoft in the UK: it is going to speed up the process of businesses folding, promote piracy and cause grief to the staff at Microsoft UK, who do a fantastic job, but have to follow the company line."

Trish went on to describe Microsoft as his "favourite vendor" to deal with, explaining that it has always responded to his concerns about the way it operates.

"NCI may be small fry in the big world of IT, in terms of company size and turnover, but Microsoft know if we say something is wrong, we can prove it and normally offer a solution," he stated.

"I have no solution to their latest decision other than, 'don't do it'."

Microsoft's plans to align its volume licensing pricing with the euro were revealed by Large Account Reseller Softcat earlier this month. The move will take effect across all EU and European Free Trade Association countries from 1 July.

Softcat warned UK customers that they should brace themselves for "significant" price rises if the current exchange rate does not "change dramatically".

In his blog post, Trish said many partners have not grasped just how severe these price hikes could be, and claimed it could lead to a "20 to 35 per cent" rise in Microsoft licensing costs in the UK.

"I hope additional resources are being budgeted for this in your piracy division, Microsoft. You will need to invest in the UK," he added.

Another Microsoft partner, speaking to ChannelWeb on condition of anonymity, backed Trish's assertions.

"It seems a ridiculous knee-jerk reaction to the European financial crisis at the moment, and is totally disingenuous to UK partners," they said.

"A more cynical partner might take the view that [Microsoft is] doing this to persuade more people to buy cloud services."

In a statement to ChannelWeb, Microsoft said most customers should experience a "modest, single-digit price rise", based on recent exchange rates.

"By establishing price consistency, Microsoft is offering clear and equitable pricing for customers and partners. Microsoft is communicating this now to offer our partners and business customers time to prepare for this change," said the statement.

"Where products are sold through partners in Europe, Microsoft is unifying its volume licensing pricing policy so that the price charged to the partner will be based on the location of the partner's channel agreement. Partners will continue to determine final pricing and currency of sale to customers."