Microsoft announced a foreign exchange rate alignment to create greater price consistency worldwide. It will adjust the cost of your cloud program licences to allow for fluctuations against the US Dollar.
The Microsoft price increases will happen on 1 April 2023 – and it’s not an April Fool’s joke. How much of an increase will depend on your location, whether new and renewed end-user subscriptions (such as Microsoft 365, Dynamics 365, etc.) and some Azure consumption.
Affected currencies include the UK, with a 9% increase and the EU, with an 11% increase.
For UK and EU customers transacting directly with Microsoft for Azure consumption through Azure.com, prices will increase on 1 April 2023.
On the other hand, Azure customers buying through a Microsoft Cloud Solution Provider (CSP) under the new commerce experience (NCE)* are not impacted.
This is because Microsoft CSP partners are charged in US Dollars for their customers' Azure consumption. The cost is converted to the local currency using a monthly variable exchange rate.
If you have an Enterprise Agreement (EA), you'll receive price protection up to the baseline price stated in your agreement. But only for the duration of your contract.
Prices may go up for some EA customers but not above the baseline price stated in their agreement.
Azure Commitment Discount (ACD) customers in the UK and EU will see prices increase, but not above their baseline price protection.
Customers who purchase annually-committed end-user subscriptions through a Microsoft CSP under the NCE are price-protected for the duration of their subscription. So that’s annually-committed subscriptions of Microsoft 365, Dynamics 365, billed monthly, annually or tri-annually
However, if you are on a monthly-committed subscription, you will pay the higher prices starting 1 April 2023. Furthermore, any new product subscriptions added or renewed after this date will be charged at the higher prices. This applies to both monthly-committed or annually-committed subscriptions.
"Effective software asset management is crucial," says Michelle Cowan, Head of Solutions at OryxAlign. "Knowing what you have, who has it, why they have it, and how long they need it are key questions to answer regarding your licensing estate."
"Ensuring current and usable information is obtained and updated regularly helps prevent unnecessary expenditures. It provides a better return on investment for the assets you need," adds Michelle.
OryxAlign, with its expertise and experience as a Microsoft CSP, can help customers overcome the challenges and complexities of effective license management. "We really can help," says Michelle.
As a Microsoft Gold Partner and Azure expert, the OryxAlign team can advise and guide you on optimal cost management and license compliance. The team can also help minimise the impact of price increases on your cost of subscription ownership.
Michelle concludes, "The action for customers is to speak to the OryxAlign team to help alleviate some or all cost increases starting 1 April 2023. Optimise your license position but act now. Don’t wait for April Fool’s day."
* In January 2019, Microsoft launched its new commerce experience (NCE) for Microsoft Azure. In October 2021, it added end-user subscriptions to the NCE. The old way of doing things is referred to as Legacy CSP.
Under legacy CSP, there was one commitment term: annual. Customers were allowed to pay monthly or annually, but the subscription was renewed yearly. Its price remained unchanged for the duration of the term (i.e., the whole year).
NCE introduced three different commitment terms: monthly, annual, and triennial. The same rule of maintaining a subscription’s price applies, but now it can change as frequently as every month if you have committed to a monthly subscription.