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News - Written by Renai LeMay on Wednesday, August 24, 2011 16:25 - 11 Comments
We don’t set Australian pricing, says Microsoft
Microsoft has responded to parliamentary pressure about Australian markups on its products by stating that it doesn’t set final prices to local customers — and stating that it was difficult to make direct pricing comparisons between countries, given differing local conditions in each jurisdiction.
The comments from the company follow a speech made by Labor MP Ed Husic in Federal Parliament last week about price markups on a number of technology goods and services sold in Australia by multinational companies like Apple, Microsoft, Adobe and Lenovo.
Husic specifically mentioned Microsoft as one of the “culprits” in the issue, drawing attention to the company’s pricing on its Office 365 software as a service platform. “Microsoft’s flagship cloud productivity suite costs 76 percent more here than in the US,” he said. When Microsoft released Office 365 in Australia in late June this year, it didn’t respond to a request for comment on the pricing issue.
In a statement issued today — a week after Husic’s comments — Microsoft said that it wasn’t responsible for setting local prices.
“While Microsoft provides guidance on recommended retail pricing, the company itself does not set the final ‘to-the-customer’ price,” it said. “The market, in the form of its channel and value-added partners who deliver those products to customers, ultimately determines retail pricing.”
“There are many factors that impact pricing decisions, including, but not limited to, channels or partner specifics, the size of the market, taxes, government regulations and costs. It is difficult to make a straight pricing comparison between countries given that the conditions vary between markets. In Australia, we also go to market with partners who add significant value to our local customers, such as localised customer service and support.”
Husic’s comments came several months after he first raised the issue of markups on technology goods and services sold in Australia back in March, at the time primarily discussing products sold by iconic technology giant Apple. After the MP’s second speech on the issue last week, Apple Australia managing director Tony King has finally agreed to meet with Husic on the issue.
Microsoft noted it was happy to do the same. “We respect Australia’s parliamentary process and we are always happy to have a dialogue with any Member of Parliament to discuss any views and concerns that they have,” the company’s statement said. Adobe has responded to the issue by noting that the problem was also seen in other industries such as the automobile sector, and listing similar complex pricing issues as Microsoft.
While many of Microsoft’s products are sold through channel partners, the company does also sell a number of products and services directly. For example, the company maintains an online Australian store where customers can directly buy software such as Microsoft Office and Windows. In addition, the company sells services such as access to its Microsoft Developer Network platform, and also subscriptions to its Xbox Live platform, for example. And price differences exist in these areas as well.
Following Husic’s comments, it has emerged that Microsoft is currently charging Australian developers about 83 percent more than their US counterparts to access MSDN services, for example. The company has yet to comment specifically on the MSDN pricing issue.
Image credit: Microsoft
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