back to article It’s Brexploitation! Microsoft punishes UK for Brexit with cloud price-gouging

“My own story would not have been possible but for the democratizing force of Microsoft technology reaching me where I was growing up,” CEO Satya Nadella told shareholders this week. But the price of that “democratizing force” is about to go up, with Britons uniquely singled out. Microsoft has reiterated to Azure customers …

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    1. Tom Paine Silver badge

      Re: Funny pricing

      Maybe the pound had done a funny u-turn or something last week.

      See for yourself:

      https://www.fxstreet.com/rates-charts/gbpusd/chart

      (use the period dropdown to select "daily", then zoom out to see the recent history of the dollar/sterling rate. )

    2. aphexbr

      Re: Funny pricing

      Apples and oranges. With the cloud hosting, MS have a fixed monthly cost plus other overheads that need to be handled, so they put up your monthly cost. There's a lot of uncertainties to take care of, plus they need to retain their ongoing profit margin.

      With XBox, they have inventory that has already been produced (possibly some from before the pound plummeted), and a known date for when the sales would happen. Furthermore, they can sell at a loss because they hope to make money back from you in the future (games revenue, Live subscription, peripherals, etc.).

      The only commonality between the two things is that you shouldn't be surprised if they also increase the cost of a Live subscription for the same reasons.

  1. Anonymous Coward
    Anonymous Coward

    Oh, Andrew, you poor little snowflake, of course everything in the world revolves around your political choices, and since they're yours, they must be the only good ones.

    So I understand you, how can any company dare to take a decision as a consequence of your choice that doesn't match the bright, independent future you envisioned?

    Or maybe, you could quit whining, and start responsibly accepting that some Brexit effects won't be good for the UK? The tone of your latest articles have decidedly changed. I liked how they were mordant, now they sound merely pathetic.

    Get a grip on yourself, man!

    1. Version 1.0 Silver badge
      Happy

      RE: IQ free comments

      Fun how all these hypercritical commentards like to vomit in the comments section without actually offering anything sensible.

      Sure, no customer likes price increases but in a business you generally only adjust your prices once or maybe twice a year - changing prices is complex and affects all sorts of things so you try to do it as little as possible. Most likely Microsoft simply looks in the crystal ball and are expecting that currency prices will readjust along these lines so they are making the correction now for the next year. If their market share drops then they may well reset the prices again to lower levels, if their competitors raise their prices then we all just have to live with it - that's the real way that capitalism works.

      1. allthecoolshortnamesweretaken Silver badge

        Re: RE: IQ free comments

        "Most likely Microsoft simply looks in the crystal ball ..."

        I'm fairly sure they use Excel.

    2. Hollerithevo Silver badge

      Ad hominem is not an argument

      As soon as I got your tone of voice I realised your comment would be a value-free zone. You must be a real prince to work with.

  2. Tom Paine Silver badge

    So are the British being punished for exercising their political choice, and choosing to leave the European Union?

    *rolls eyes

    No, of course not. As the headline says, MS are just using it as a handy excuse to slip some price rises through in the hopes no-one will notice.

    (Alternatively, perhaps they think cable -- GBPUSD -- has further to fall. Cable's recent bottom was just above 1.20, which is a 20% drop from the 1.50 it was at on 23rd June. The recent bounce after Davis admitted on the record that it was conceivable that we might end up paying-to-play in the Single Market will disappear very quickly if, for whatever reason, it looks like the government is more inclined to leave the SM as the price of reducing immigration by 70%. And there consensus around the forex desks of EC1 - EC3 was for a long term equilibrium somewhere between parity ($1 to the pound) and $1:15. In which case you can expect Microsoft, and everyone else who spends US dollars to produce goods and services, to whack their prices up even further.

    1. Jess

      Re: leave the SM as the price of reducing immigration by 70%.

      The only effects leaving the SM will have on immigration.

      1. EEA citizens who have been living here for 5 years will no loger have an automatic right to residence. (Presumably meaning a big bump in applications after article 50).

      2. With no more freedom of movement, migrant worker numbers for the EEA will drop (given paperwork, hostile attitude and loss of value of the pound) this will will leave a vacuum which will be filled by immigrants.

      3. Since our economy will likely literally be decimated (at best), there should be less demand for immigrants to take up the slack.

  3. Dwarf Silver badge

    Corporate Russian Roulette

    Seems to me that the "fantastic cloud" is more like playing Corporate Russian Roulette every day.

    Will it work today ? - With these "affects multiple zones" type outages that are not supposed to be able to happen.

    Will it suddenly cost me a lot more than yesterday ? / more than the budget is set for.

    It is going to be interesting when some accountant in some MegaCorp refuses to pay an invoice they don't get / is over budget / printed in the wrong font, etc. and the cloud service is taken off-line and the company stops.

  4. James 51 Silver badge

    I doubt it is a punishment as such, more like an opportunity to gouge with a reasonable sounding excuse to hide behind. I know prices jumped a lot around Dublin when the euro was introduced as vendors of all stripes took advantage of confusion about the new exchange rate to rip people off.

  5. Stern Fenster

    Re: Price gouging?

    "Pound fell 19%, US company puts up prices 22%. That's actually fair: note that (1/0.81) = 1.23"

    Pre-Brexit, pound was trading around 1.42 (if we discount the day immediately before, when the dim little currency gamblers believed the "remain" forecasts and talked it up to 1.50 in hopes of making a fat killing). This morning it's trading around 1.26. That makes a fall of 11% in normal arithmetic.

    1. Steve Todd

      Re: Price gouging?

      Actually the pound was trading in the mid 1.50's range at the beginning of the year. It fell with the announcement of the Brexit poll. We're down over 20% on the year, and a lot of companies who hedged their exchange rates are going to have to start putting up prices next year as the hedges expire.

  6. You aint sin me, roit
    Trollface

    I'd be happy...

    If they also cut their inane cloud adverts by 22%

    What's more, I've bought my last ever version of Windows!

  7. Doctor Syntax Silver badge

    Everyone seems to have missed the obvious reason why they've increased prices: because they can.

    It's called lock-in.

  8. Anonymous Coward
    Anonymous Coward

    anyone esle think orlowski is desparately trying to become a gruaniad tech journo / columnist

    Anyone else getting a bit fed up with an increasing amount of pseudo left wing filtered, bs and un thought through kneejerk output from Orlowski.. seems to me like's desperate to be be a huff post of gruaniad jurno .. anything yank = bad, anything google = mega evil .. anything apple .. well he never writes about them. as OPs have commented, not an msoft fan .. but this price gouging crap of orlowski's is just so much tosh ... £ fell 22% against dollar in first week of brexit, still 18% or so and if the eu play's hard ball it will fall more than 22% from pre-brexit levels. all their kit ,, bandwidth and most of the people writing the software are USD costs. only uk costs are sales drones .. This article is a pretty disingenuous, hot air, piece of piffle. Agree with OPs, it would be better and more transparent to price in dollars like AWS etc.

    1. Anonymous Coward
      Anonymous Coward

      Re: anyone esle think orlowski is desparately trying to become a gruaniad tech journo / columnist

      It's an opinion piece. As all of AO's it's well written, enjoyable to read and somewhat provocative. Whether you agree or disagree (as I usually do) his articles generate comments that are, on the whole, as least as worth reading as the article. But are you really that familiar with his output? I'm not sure "left wing" is an epithet that springs immediately to mind!

    2. Adam Jarvis

      If you're in it for the long term...

      If you're in it for the long term, Microsoft should soften the blow during the hard times, profit in the easier times. Crucially, you take these factors into account when setting your inital price (irrespecitve of AWS Pricing). Ebay sell Yoyos, Microsoft don't need to. Cloud should be about security and stability, even when the physical World around it is going through a period of change/mayhem.

      Microsoft have really forgotten core values here. MS will suffer for it.

  9. Anonymous Coward
    Anonymous Coward

    Punishment

    Brits are free to punish Microsoft, Amazon, et al, by dumping them overboard.

    Trump has expressed a desire to punish them as well, and I hope he does.

    1. PassiveSmoking

      Re: Punishment

      Yeah I'm sure there will be a mad rush to go with all those other UK based cloud providers whom aren't subject to the Snooper's Charter..... oh, wait.

  10. smartypants

    Yes it would make sense that Trump says he will punish the most successful businesses the US has. After all, nothing else he says makes sense and as he's discovered, being a president is 'harder than he thought' which is probably why he's decided to go back on the campaign trial and talk bollocks to rednecks again which is something he can handle .

    1. Anonymous Coward
      Anonymous Coward

      Most successful? Microsoft is a shitty monopoly that can't do anything right, living by lock-in alone, dragging down the whole country by screwing over other businesses and especially governments.

      Oracle of course is another...

      He's gonna need those rednecks' help, to get after their town councils, school boards, and state legislators to stop taking it up the ass from these companies. Amongst other things..

      1. Ken Hagan Gold badge

        So you think MS survive (and make massive profits) despite being crap, by dint of their ability to lock-in customers and suck money out of governments both at home and abroad.

        And you aren't impressed? I'd call that *stunningly* successful. If they were doing by merely by offering quality products at reasonable prices then that would be oh so boringly mundane and unworthy of comment.

  11. MakingBacon

    The simple answer is ...

    Boycott MS and their cloud services. Without customers, The muppets who inhabit MS will soon back down when they see their profits dwindle.

    Job's a good 'un!

  12. JimS

    Screw us, screw you.

    We've only just been screwed over by them and now we're getting it again.

    It's almost like they want to cull smaller businesses.

    Their subscriptions are already expensive for what they are (for us), they dropped Access from the Business subscription and added it to the ProPlus subscription, but that has no email (yup the 'Pro' version doesn't come with email) so we ended up having to go the the enterpise subs.

    When the contracts up in a few months, we'll be free of O365 dependant systems, so we'll likely move on, there's only so much gouging small business will take before the middle finger gets wound up.

  13. Jason Bloomberg Silver badge
    Headmaster

    -18.9% = +22%

    Microsoft has reiterated to Azure customers that prices will go up by 22 per cent

    The value of the British pound has weakened more dramatically against the US dollar, dropping by 18.9 per cent since 24 Jun

    A drop of 18.9% requires an increase of 22% of the new value take it back to the same level.

  14. doke

    existing contracts and future instability

    I suspect part of the price hike is to compensate for the existing contracts at lower prices. The new ones get gouged to make up for MS's losses on the old ones. Also, they may be factoring in some "insurance" for future instability in the UK pound vs the US dollar. Between BREXIT and Trump, the financial future is uncertain.

  15. This post has been deleted by its author

  16. Boris the Cockroach Silver badge
    Windows

    Perhaps

    a better question to put to m$ and the other cloud providers is

    "Will your prices come down just as fast if the £ rises in value?"

    Or will it be like the oil companies where the rises go on instantly and the price only wanders down after 3 months and tesco doing a price cutting exercise........

  17. Anonymous Coward
    Anonymous Coward

    It's not just cloud

    The NHS is being hammered for license cost for software too and we're not in the position to switch to linux due to staff simply not wanting to learn and many clinical systems having no hope of working with anything non-MS anytime soon.

    Sad times but MS is gorging on whatever it can and we're not pushing hard enough as a country (UK, not England/Scotland/Wales/NI) for better pricing from them within the NHS.

  18. Spanners Silver badge
    Alert

    Brexit means codgeup

    Anyone who voted out needs to go into a corner and be miserable. The remaining 5/8 of the electorate needs to figure out how we are going to get out of this sorry hole.

    Ideally, we say "Oops!" and announce that not enough people voted for it(*) and we are looking to send Nigel, Boris and Gove to Washington as new cleaners for the embassy.

    (*) No, it wasn't 52% of the electorate. It was little over a third of electors who voted for the economic seppuku of Brexit.

  19. Lars Silver badge
    Happy

    "So are the British being punished for exercising their political choice, and choosing to leave the European Union?".

    Sounds plausible, I have been punished for many stupid choices I have made in my lifetime.

  20. bombastic bob Silver badge
    Megaphone

    just tell Micro-shaft to PACK SAND

    Here's what you do when Micro-shaft arbitrarily raises prices on you, giving "whatever" as the excuse:

    tell them to PACK SAND, and then GO ELSEWHERE.

    Who needs 'Azure' anyway? They're NOT the ONLY game in town!

  21. G R Goslin
    Happy

    Ypou're forgetting ......

    You're forgetting the overriding maim of capitalism, "All the trade will bear" MS have seen an opportunity to up prices, and have "capitalised" on it I, As a UK citizen can stand back and laugh, since all my kit is largely self built, and runs on free Linux. Clouds? I have my own.

  22. TVU Silver badge

    "It’s Brexploitation! Microsoft punishes UK for Brexit with cloud price-gouging"

    Nope, it's just a natural market response to the crash in the value of the pound as a result of all those who thought it was a good idea at the time to vote for Brexit (and just look at what a "success" it's been so far - NOT!)

  23. Malcolm Hall

    Goldman Sachs predicts pound will sink to $1.14 by end-2017 so 22% drop is still a pretty good deal.

  24. Anonymous Coward
    Anonymous Coward

    This is what happens when you vote to screw your currency

    The remain camp told you:

    - Brexit would screw the currency

    - The screwed currency would mean higher prices

    Looks pretty accurate so far to me (it was obvious to anyone with half a brain anyway though).

    This is completely unsurprising and people should stop moaning about higher prices and accept that's their choice or campaign to not leave the EU. Or you could live in fantasy land with the Brexiteers and pretend none of this is really happening (whilst you're still playing higher prices).

    1. gnasher729 Silver badge

      Re: This is what happens when you vote to screw your currency

      "Brexit would screw the currency" - that was just scaremongering.

      "Brexit screwed the economy" - no, that wasn't Brexit, that was irrational and irresponsible speculators.

      Brexit is doing just fine. The pound only dropped in your imagination. If you claim otherwise, you are just a remoaner. And Fararse must become ambassador, because Trump wants to eat Rochers.

  25. anonymous boring coward Silver badge

    "“My own story would not have been possible but for the democratizing force of Microsoft technology reaching me where I was growing up,”"

    That should have been back in the days when pirating Windows and other MS software was easy then, presumably?

  26. Anonymous Coward
    Anonymous Coward

    Just use the dollar

    They should price their services in the dollar if that's how they evaluate their profit.

  27. Bladeforce

    Oh please

    No matter much talking of this here the facts are Microsoft will screw you over at any chance. Sad being stuck in the vicious circle that is Microsoft.

  28. Anonymous Coward
    Anonymous Coward

    Lol - you deserve everything you get buying microshite. Hope you made a few tech guys with MS cert feel more secure. What's that? You let those idiots choose services that protect the value of their shitty MS training.

  29. Anonymous Coward
    Anonymous Coward

    Why bother with sham excuses?

    It's not like Microsoft have ever needed any reason in the post justify taking the piss with their over the top pricing for poorly written software (apart from the reason that they are truly greedy!)

  30. Will 28

    It's not Microsoft's job to be fair

    Others have pointed out things along these lines, but I just wanted to chime in with how utterly stupid this article is. Is this actually trying to suggest that the thing that keeps microsoft's prices where they are is their sense of fairness and their desire to provide their services to us at as low a price as they can manage.

    Other commenters here seem to be suggesting that prices are dictated by the costs of providing the service / product - that's a very bad model for a business to follow, I think HP tried it with their tablet range. Microsoft are a business, while they might have certain "community responsibilities", their primary job is to squeeze as much money out of us as they can. They will sell their product for as high a price as they can get away with, and they are right to do so.

    The things that are stopping them from sending prices through the roof is whether we feel that we're willing to pay that amount for the service at all, and whether we feel it's the best deal for us compared to what else is on the market (i.e. the competition). It is completely non-sensical to demand a justification for price rises from companies, I'd be perfectly satisfied (in fact I'd find it refreshing) if they replied to this article and said "it's because we like money, you idiot".

    1. anonymous boring coward Silver badge

      Re: It's not Microsoft's job to be fair

      " It is completely non-sensical to demand a justification for price rises from companies, I'd be perfectly satisfied (in fact I'd find it refreshing) if they replied to this article and said "it's because we like money, you idiot"."

      The world doesn't work like that.

      You may admire Gordon Gekko, but those shafted by him would like to return the favour.

      Business is about trust as much as anything else. Even criminals know that when they deal with each other.

  31. Jean-Paul
    Trollface

    It's the cloud

    So why not vote with our feet and just not use Microsoft Azure. It's the cloud the point is that it is easy to move your services to another providers ;)

    Just leave.

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