Microsoft shifts to annual exchange rate price revision for cloudy products

Microsoft has decided to shift to annual price adjustments for its commercial cloud services, instead of its current twice-yearly changes. The software giant happily bills customers in their local currencies but always keeps those costs pegged to the price it charges in US dollars. Since at least 2024, Microsoft has revisited local currency prices for its commercial cloud services twice a year. On Wednesday, the company announced a change in policy that means it will now revisit foreign currency prices once a year, on January 1st - with an option to make other changes in limited exceptional circumstances." Microsoft hasn't explained what constitutes exceptional circumstances, but the company is canny enough to avoid leaving itself exposed to rapid or major exchange rate changes that would hurt its bottom line. Microsoft's announcement argues annual revisions mean greater pricing predictability while continuing to account for sustained fluctuations in foreign exchange rates." And perhaps it does, if foreign exchange fluctuations work in your favor across a year. But if January 1st rolls around when your local currency is weak compared to the greenback, the predictability" Microsoft provides could mean your bills in local currency are high for a year. Under Redmond's past semi-annual local currency price revisions, users did face the possibility of more frequent price changes but also had an extra chance for exchange rates to work in their favor. Microsoft says it will offer advance guidance for currency-related price changes in November. Microsoft, and other public clouds, try to make costs predictable by offering fixed-price multi-year deals. Redmond also tries to tie licensing to those arrangements, a controversial practice that got it into legal trouble in the European Union. The Windows behemoth will continue to announce price changes for other products whenever it feels like it.(R)