This article focuses on Microsoft customers in Australia, but the issues are relevant to many non-USA customers who faced price increases last year, including those in Japan, Canada, Singapore, the UK, Sweden, Norway, and Denmark—all impacted by price hikes justified by currency fluctuations.

On September 1st, 2023, Microsoft Australia raised Azure prices by 9%, citing the AUD-USD exchange rate of 0.64. Microsoft assured customers this adjustment was necessary due to unfavorable exchange rates. They also committed to reviewing the Fx rate every six months, with potential adjustments. However, no changes occurred after the first review.

As of September 1st, 2024, the exchange rate has improved to 0.6762, a 5.66% shift. Based on Microsoft’s rationale, this should trigger a price reduction for Australian customers, aligning Azure prices more closely with current economic conditions.

$200k per month Azure spend:
5.66% price reduction = $11,320 savings per month
Add Unified Support reduction = $1,047.10 savings per month
3-year Azure & Support Agreement savings = $445,215.60

$5m per month Azure spend:
5.66% price reduction = $283,000 savings per month
Add Unified Support reduction = $9,377.45 savings per month
3-year Azure & Support Agreement savings = $10,525,588.20

Despite this improvement, no Azure price adjustment has been communicated by Microsoft Australia. This raises questions about how exchange rate fluctuations are factored into Azure pricing. Customers who were promised regular reviews and adjustments deserve clarity and consistency in pricing.

When a company as influential as Microsoft makes a public commitment, it’s essential this is upheld with integrity. Regular reviews and transparent communication around pricing are key to maintaining trust. Customers need confidence that their provider is responsive to market changes and committed to fair pricing.

As Microsoft continues to serve its customers in Australia and globally, these principles must remain at the forefront. Pricing adjustments that reflect current economic conditions align with their commitment and reinforce customer trust. Additionally, the 5.66% improvement alongside the 25% profit tax that Microsoft Australia doesn't pay results in a combined 30% additional profit margin.

We hope Microsoft addresses this, as transparency and responsiveness are vital to strong, long-lasting customer relationships.

Note 1: Azure Reserved Instances are pre-paid for 1 or 3 years, so they won't be impacted until renewal unless reset through RI Exchange or RI Cancellation policies.

Note 2: These examples focus on Azure because Microsoft can adjust Azure List Prices during an EA. The 9% increase applies to all other Microsoft products at EA renewal. Not passing on the 5.66% Fx improvement could have a much larger impact.