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April 11, 2017

UK government dodge Microsoft Brexit price hike in new deal

Microsoft was just one major tech company that announced price hikes following Brexit.

By Ellie Burns

The UK government will avoid paying an extra £15m in license fees, in a deal with Microsoft designed to dodge the tech giant’s post-Brexit price hike.

The UK government has signed a deal which will see the public sector dodge the tech giant’s post-Brexit price hike – a dodge which will see the government save an extra £15m being spent on license fees.

The government already had a pricing deal with Microsoft until June 2017, but sources speaking exclusively to The Register said that a deal has been agreed to extend the agreement by another year. The deal, reportedly signed by the Cabinet Office’s Common Technology Services, will apply to nearly 200,000 central government customers as part of the move to Microsoft Offcie 365. The deal reportedly includes a freeze for departments at December 2016 prices.

Microsoft planned to up the prices of its software and cloud services following Brexit, blaming the fall in sterling. UK customers from January 2017 are set to have to shell out up to 22% more as the company looks to realign prices with Euro levels. Customers can expect a 13% increase for enterprise software products and 22% for cloud services.

READ MORE: Brexit price rise hits software, cloud and devices – here are the tech companies charging more

Commenting on the price change, Microsoft said: “Prices for new product additions under existing volume licensing agreements and purchases under new contracts will be as defined by the price list at the time of order.

“This pricing change will not apply to consumer software or consumer cloud services.”

Microsoft were not the only tech firms to raise prices – Apple has increased the cost of some of its UK products by as much as 20%, with the price for a Mac Pro rising from £2,499 to £2,999. With prices remaining the same in the US, the price rise has again been blamed on the falling pound with the Mac Mini now retailing at £479, compared to the previous £399.

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HP, meanwhile, announced that devices will rise by 10% in the UK, with the company citing the price increase as a means to ‘“maintain a sustainable and consistent approach to our operation in the UK and Ireland.”

The deal struck with Microsoft is a huge coup for the government, as the US tech giant reportedly has around £400m in public sector licenses.

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