Microsoft India has revealed plans for a 6% price increase in both its commercial on-premises software and online services, affecting Microsoft 365 and Dynamics 365. Scheduled to take effect from February 1, 2024, this move marks the third consecutive year of price adjustments in the country, a decision attributed to aligning Indian rupee pricing with prevailing US dollar pricing levels in the Asian region.
In a communication sent to enterprise customers on December 6, Microsoft explained that the price adjustments aim to harmonize the prices for commercial software and online services between India and the broader Asian market. The company regularly evaluates the impact of local pricing for its products and online services, ensuring reasonable alignment across regions.
According to the email notification to customers, starting February 1, 2024, Indian rupee prices for commercial on-premises software will see a 6% increase, and online services will also experience a corresponding 6% hike. This adjustment is intended to realign prices close to the prevailing USD pricing levels in the Asian region.
On Microsoft.com, the revised Indian rupee prices for direct sales to India-based customers, specifically for select online services such as Microsoft 365 and Dynamics 365, will be reflected as of the aforementioned date. For business customers, it’s emphasized that existing orders under volume licensing agreements for products subject to price protection will not be affected by these changes. However, prices for new product additions under such agreements and purchases under new contracts will adhere to the pricelist at the time of order.
The email further assures that customers across India purchasing online services in Indian rupees will continue to find Microsoft’s cloud offerings highly competitive. In cases of indirect sales through resellers, final prices and the currency of sale will continue to be determined by the resellers.
This announcement comes against the backdrop of Microsoft’s continuous efforts to assess and adjust local pricing to maintain a reasonable balance across various regions. The decision to implement these changes appears to be a strategic response to the significant adoption of Microsoft’s products and services during the pandemic years.
While Microsoft emphasizes the necessity for these periodic assessments to ensure alignment across regions, some industry observers note that the timing coincides with broader economic trends. The Indian rupee, for instance, experienced a dip on December 7, influenced by the weakness in other Asian currencies. At 10:40 a.m. IST, the rupee was at 83.36 to the dollar, a slight decline from the previous session’s 83.3250.
Additionally, the Indian rupee’s inability to strengthen has been noteworthy, even in the face of increased equity inflows. Despite overseas investors injecting over $2.5 billion into Indian equities in December, compared to $1.08 billion in November according to NSDL data, the rupee has not seen a corresponding uptick. This underscores the complexities of the current economic landscape and the challenges faced by various sectors.
In conclusion, Microsoft’s decision to adjust prices in India reflects the ongoing dynamics of the global economic landscape, with the company strategically realigning its pricing structures to ensure competitiveness and alignment with regional market trends. As the business environment continues to evolve, such adjustments become essential for multinational corporations to maintain equilibrium and provide value to their diverse customer base.
