The price of Microsoft’s Azure cloud services will change every month from Friday onwards, thanks to Microsoft’s decision to move to a single price list in US dollars but bill in local currency.
Microsoft announced the change to US dollars when revealing the refresh of its Cloud Solution Provider (CSP) program in June 2019.
Those changes kick in on Friday, 1 November, for new purchases. Current customers will be migrated to the new arrangement over a year.
From that date, new Azure buys will be priced in US dollars, with customers charged in Australian dollars. Microsoft will use Thomson Reuters’ benchmark exchange rates, set on the first day of each calendar month. That rate will apply to all transactions during that month.
This new arrangement will mean that Azure bills fluctuate month to month based on both variable usage and exchange rate shifts.
Microsoft thinks customers won’t complain because their Azure bills already vary considerably.
But the Australian dollar has fallen from 81 US cents to 67 cents over the last two years – a considerable price hike for goods and services priced in US dollars. While few individual months see a fluctuation of more than a couple of cents, unusual economic events could cause larger dips or leaps.
Microsoft is betting that partners will appreciate a single price list because its efforts to harmonise global prices didn’t always keep up with exchange rates. That meant bargains could sometimes be had by buying Azure from nations that hadn’t adjusted local prices to catch up with exchange rate movements. Those loopholes meant Microsoft partners sometimes faced global competition on an uneven playing field.
The enhanced CSP program is also all about letting partners shine on the basis of their value-added services, instead of just price. Microsoft thinks the best way to stand out is to drive towards “admin on behalf of” status that sees partners act as outsourced managers for businesses’ Azure fleet, then sell managed services and other consultancy offerings.
Microsoft’s promised tools to migrate customers into its new pricing model, plus tools to let its partners analyse and optimise customers’ use of its cloud to ensure usage is appropriate and bills don’t blow out.
In recent discussions with Microsoft, CRN has asked company representatives why it has all-but ceased promotion of its on-premises products. The answer has been that Microsoft is emphasising the products and services it thinks best suit its customers. Yet when your correspondent spends time among resellers and consultancies, I’m told with increasing frequency that repatriating workloads from clouds to on-premises operation has recently become a growth market.
Fluctuating bills might just make it even hotter!