Oct 25, 2016 02:15 PM EDT
Microsoft Price Adjustments Raised to 22 Percent in the UK Following Brexit [VIDEO]
Following the United Kingdom's vote to leave the European Union, Microsoft plans to increase prices significantly to counter the falling pound.
A lot of financial uncertainty in the UK has been caused by the Brexit vote. Some major tech companies have already moved to cushion the impact of the declining pound, even before the government has yet to decide which action to take when it finally implements the split from the European Union by invoking Article 50. Microsoft has already signified that it too will adjust prices starting Jan. 1, 2017 by as much as 13 percent, while its cloud services will be raised to 22 percent.
According to ZDNet, Brexit could change how tech firms do business in the UK and Europe, but the immediate impact would be reflected in the higher prices thousands of UK firms and government departments pay for software and services. UK resellers and partners will also be affected by the price adjustment.
The changes are part of Microsoft's periodic assessment of its local pricing ensuring reasonable alignment across the region. Apple's hardware price hike last September was due to the fall in the value of the pound, though prices of consumer software and cloud services will not be affected. However, resellers and partners could still decide to impose their own increases since Microsoft doesn't set the pricing they offer their clients, Engadget has learned.
The dramatic fall of the pound against the Euro and the US dollar after the Brexit vote on Jun. 23 affected other firms as well. Some firms including HP, Dell, and Apple have already increased their prices in the UK.
Customers with existing agreements are shielded from the increases until they renew their subscriptions. Previously ordered enterprise software and cloud services will not experience a price adjustment during the term of their agreement. This will also benefit business customers with cloud subscriptions such as 'Office 365', which normally covers 12 months from the start of their paid subscriptions, according to Engadget.
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