Microsoft’s cloud services to turn pricier by 10%

From January 2017, Microsoft India will increase the price of cloud services and on-premises software for enterprises.

In a note to distributors and resellers, Microsoft said that prices of its cloud services will go up by 10 per cent and on-premises enterprises software prices by 15 per cent. In India, Microsoft’s standard virtual machine with 20 GB hard disk capacity is priced at ₹1,000 per month and this would go up by ₹100-150.

The last time Microsoft took such a step was in 2014. When contacted, a Microsoft spokesperson confirmed the development. These changes are only applicable for India-based customers. The Redmond-based major also said that for business customers, these changes will not affect existing partner orders under annual volume licensing agreements for products that are subject to price protection.

Price protection is an option given to customers wherein they can lock the software price in a defined range — similar to buying a stock in the market.

So, for virtual machines, where the pricing starts around $100 per month onwards and this is built on factors such as storage space, per CPU usage to traffic utilisation, according to industry watchers.

Further, prices for new product additions under such volume licensing agreements, and purchases under new contracts will be as defined by the channel price list at the time of order, the company said in its note to stakeholders.

In India, if a company wants to backup its data onto the Windows Azure cloud, before the increase was priced at ₹1,500 per month for its basic backup and restore options is expected to go up in the range of ₹150-225 every month. Database services, which priced at around ₹ 8,000 per month, will go up in the range of ₹800-900.

Microsoft’s price increases have baffled some of its customers. “The whole logic of moving to the cloud was cost reduction and Microsoft seems to have done the opposite,” says the head of tech of one of the leading private sector banks in India who is contemplating to move his infrastructure to Amazon Web Services (AWS).

The reason for this can be attributed to the many benefits offered by AWS in comparison to Microsoft. “If a company commits for a long time with AWS, they get significant price benefits and features such as the option to bid for space in some server PCs at much lower prices,” said Mayank Dhingra, co-founder, Betaout, a start-up which uses both Microsoft and AWS.

In July 2015, prices of Windows Azure in Eurozone went up by 13 per cent and in Australia it rose by 26 per cent, according to reports.

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