Microsoft To Hike Prices Of Software, Services In India By Up To 11%

Tech major Microsoft has reportedly announced a hike in prices of commercial software and services in India by up to 11%. 

The company cited currency fluctuations for the rise in prices and said the hike will come into force from February 1, 2023. The changes to the price list will ‘harmonise’ Microsoft’s prices for its software and services between India and the Asian region.

“Starting February 1, 2023, Indian rupee prices for commercial on-premises software will increase by 4.5%, online services will increase by 9%, and Windows GGWA will increase by 11% to realign close to prevailing USD pricing levels in the Asian region,” Microsoft was quoted as saying by news agency IANS. 

Prices of productivity suite Microsoft 365 and business application Dynamics 365 will be updated with revised prices for Indian customers on the online website beginning February. However, the changes will not be applicable for business customers with existing orders which are subject to price protection. 

Meanwhile, the prices of purchases under new contracts and all new products added under licensing agreements will be decided by the existing price list at the time of ordering.

Microsoft, however, clarified that the announcement will not cover hardware, Office and Windows consumer products.

Price Hike To Offset High Costs

Microsoft’s decision to increase the prices of Indian enterprise software suites comes after years of minimal pricing in the country. In the last one year, both Microsoft and Google have hiked their prices. 

While Microsoft 365’s price was increased by around 15-20% in March earlier this year, Google Workspace also reflected an updated pricing beginning June this year. 

The latest announcement comes at a time when high inflation and labour costs have led the software-as-a-service (SaaS) firms to consider hiking prices. Increased costs have also led to companies considering layoffs as a way to offset the increasing burden on their bottom line.

The increase in prices also comes at a time when a big chunk of SMEs have moved online. As the market size has increased, many companies have stopped offering hefty discounts to onboard new customers.

However, the overall productivity software market sees no signs of slowing down. As per a report, the revenue generated from the space in India stood at $754 Mn in 2021 and is projected to reach $1.3 Bn by 2027.