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By | Paul Kunert 8th February 2012 16:04

Resellers: Microsoft price hike was 'demanded by Euro country bosses'

Insiders say UK channel exploited weak pound to fuel deals on continent

Microsoft's planned overhaul of volume-licensing prices was in response to cries of frustration from its European country managers unhappy their UK counterpart were benefiting from the regional disparity to win biz on the continent, channel sources claim.

As The Register recently revealed, the software giant is aligning European prices for volume licences to the single currency from 1 July, meaning UK customers charged prices based on the current euro and sterling exchange rate could see rises of up to 20 per cent.

A spokesman at Microsoft insisted it was simply trying to harmonise pricing across the region. "It is to make sure pricing is consistent", he told The Reg.

However, some insiders claimed the vendor had buckled under pressure from Europe to address the foreign exchange rate differential that was particularly evident with the weaker pound.

"It was seen as a problem; Microsoft entities in Europe were not getting the right revenue recognition. From a corporate perspective who cares, but local managing directors are under pressure to hit sales targets," claimed a channel source.

Another source close to Microsoft said some European resellers had also made it clear they were not happy, saying: "The pound wandered away from the euro [which] magnified the pricing delta".

Computacenter today told customers through a press statement that although the new pricing structure would not go live for more than four months, "we would like to provide you the opportunity to address these changes early".

The overhaul may well stimulate demand among some customers between now and the end of June, but it could also force others to consider alternatives after the deadline, said one Microsoft Large Account Reseller.

"You may look at it as a small-term opportunity to get customers to bring forward renewals, but after 1 July, is it enough to put some customers off Microsoft or the agreement they are on? Potentially... but switching from Microsoft is not easy." ®

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