Microsoft cuts licensing costs

Microsoft will slash the cost of its volume software licensing by 3 per cent from July 1 in line with the vendor's exchange rate review approach to pricing announced last October.

According to Microsoft officials, the price cut is the result of the strengthening Australian dollar and will therefore only affect Australia.

Ross Dembecki, lead product manager of Microsoft, denied that the price cut was the result of a negative market response to Licensing 6.0 and the clause that requires users to upgrade regularly or else pay the full cost of a licence each time they upgrade.

Under the new exchange rate review pricing system, Microsoft price lists are reviewed on a monthly basis in relation to the exchange rate. If the Australian dollar rises or falls consistently for a two-month period or more, Microsoft will adjust its pricing up or down to reflect the revised exchange rate. It will then provide a 30-day notification to the channel.

Dembecki said that Microsoft's previous approach to software licence pricing in line with fluctuating exchange rates was "ad hoc". "There was no set policy and no formalised set of criteria that would trigger a review."