Cornish VAR defends Microsoft over licence-profiteering claims

NCI Technologies hits out at "Microsoft haters" for claiming its volume licensing pricing shift is a money-making exercise

Microsoft VAR NCI Technologies has leapt to the defence of the software giant, following claims that it plans to profiteer from aligning its volume pricing with the euro.

In a blog post on the Cornwall-based VAR's website, the firm's managing director Andy Trish hit back at claims made by so-called "Microsoft haters" who have described the move as a money-making exercise.

"This pricing change is going to happen but it is not out of Microsoft trying to make more profit (for those Microsoft haters) because the price rise in the UK is going to be countered by price drops in other EU countries, leaving Microsoft no better off," he wrote.

Trish also used the post to counter claims made by "open-source lovers" that the price hikes should entice some customers away from proprietary software products.

"Having seen many comments from open-source lovers about [moving away] from Microsoft to free software, [and not needing] to worry about the increase, I wholeheartedly disagree," he stated.

"Open source is free for the basics, [but] as soon as you want to do something different, you have to buy add-ons. [Also] the support for Microsoft products is vast. The kid next door knows Microsoft, but ask them what open-source software they know and you will see [glazed] eyes," he added.

Serial blogger

The post is the second Trish has published in recent weeks about the euro price shift, which he previously claimed could lead to a "20 to 35 per cent" rise in Microsoft licensing costs in the UK.

However, in his latest missive, he revised down his earlier forecast, claiming a maximum price rise of 27 per cent is looking far more likely.

"Having analysed the exchange rates, I stick to my guns and reckon it will mean at least a 20 per cent price hike, but would drop my upper limit to 27 per cent as things stand," he explained.

"Of course, this all relies on the euro not going into freefall and disintegrating completely, which could still happen."

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

Like Softcat, Trish used the blog to set out exactly what products will be affected, but also provided further details on the amount by which their prices might rise.

They include Open Value, Open Value Subscription, Select, Select Plus, Enterprise Agreements and Enterprise Subscriptions and SPLA licences.

"[All these] will see at least double-digit increases, unless of course the euro gets very strong, very quick," he explained.

"Existing agreements will be price honoured, so if you are looking to renew them, you will benefit from doing so before 1 July, even if it means renewing earlier than planned."

Worldwide changes

The changes could be the first stage in Microsoft's plans to introduce equal pricing across the globe, eventually in line with the dollar, he speculated.

"Australia, Canada and Europe pay a lot more than the US for the same software, despite it being delivered through the internet with software codes stored in the cloud.

"Microsoft should allow all partners to sell globally, without [needing] entities in each of the regions," he said.

"Maybe one way to protect the distributors would be for Microsoft to create a policy of buy locally, sell globally," he offered.

Speaking to ChannelWeb, Trish said that since his first blog post on the subject, he has been contacted by "many Microsoft partners" seeking guidance on the price changes.

"There has been a lot of interest in the first blog, but the idea behind it was not to bash Microsoft. Some members of the open-source community may have misunderstood that," said Trish.

"The aim of it was to provide partners with an idea about how the changes could affect them and their customers, which is why I did a follow-up, containing a few more details. For example, not many partners seem to realise that Office 365 licences will be affected."

Despite this, Mike Chambers, managing director of Microsoft LAR Comparex UK, said the price hike may prompt end users to accelerate their move to the cloud.

"As always with price increases, end user organisations will look at which products they are or are not using – and whether they push them into the cloud so they can turn them on and off," he said.

Microsoft was unavailable for comment at the time of writing, but has previously stated that, based on last month's exchange rates, end users should experience a "modest, single-digit price rise."