Q: How can software vendors raise licensing prices?

Opinion

Q: How can software vendors raise licensing prices?

A: Because they can...

There's a story on MicroScope.co.uk about Microsoft and the increases it intends to make to its volume licensing programmes from 1 July, writes Billy MacInnes. The bad news is that there will still be price increases but the good news is they will be less than originally feared.

Microsoft had originally told people the UK price increases, designed to maintain price consistency across Europe in its volume licensing programmes, would range from 7.5% to 33%. Now, the figures have been revised downwards, ranging from 1.7% to 25.9%.

A Microsoft spokeswoman attributed the adjustments to "recent exchange rates" which obviously alludes to the way the euro has been dropping in value against sterling.

But, and I know this will probably demonstrate all too clearly to people out there how I could never be a proper businessman, I wonder why there have to be any price increases at all. What is it, intrinsically, that allows software to increase in price? Especially as, as far as I understand it, in volume licensing deals the actual amount of media involved that has a cost attached to it is often very small.

Don't get me wrong, I can understand the argument about exchange rates having an effect on prices in different countries, but that surely makes more sense when we're talking about a physical product rather than the rights to replicate a copy of Office 2010 across x number of PCs and laptops either with the click of a mouse button.

I'm not just picking on Microsoft here. The same argument should apply to other software vendors that provide volume licensing deals. Unless they are physically producing a DVD of the product, a box and a manual for each user, there doesn't seem, to my mind at least, to be any justification for raising the price of their software.

Still, if software companies can raise their prices and get people in business who know more about business than me to pay more, who am I to judge?

This was first published in June 2012

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