Microsoft is charging Australian software developers about 83 percent more than their US counterparts to access subscription services associated with its Microsoft Developer Network (MSDN) platform, it has emerged in the wake of parliamentary criticism of the company over price differences between the countries.
MSDN is the platform through which Microsoft manages its relationship with external developers and testers — including hardware developers who use its software to run their devices, software developers who develop third-party software for Microsoft operating systems, and others who engage with the broad ecosystem surrounding the company.
To provide developer access to its software, Microsoft offers an annual subscription service, which allows external organisations access to various resources such as software repositories, technical support, online learning and education and even hosted platforms such as its Windows Azure cloud computing system. It is extremely common for large organisations, as well as software development houses and even individual developers, to maintain MSDN subscriptions as a normal cost of doing business.
None of the included benefits available through the various MSDN subscription plans appear to require dedicated onshore Australian assets. However, according to global pricing lists publicly available online, Microsoft appears to be charging Australians a standard 83 percent more to access the MSDN featureset.
For example, the top of the line MSDN subscription, ‘Visual Studio Ultimate with MSDN’, is listed as costing US developers US$11,899 per year (AU$11,343), whereas Australians pay AU$20,775 — a markup of 83.1 percent.
It’s a similar case with the ‘Premium’ version, which costs US developers US$5,469 (AU$5,214) but Australians AU$9,530, and the ‘Professional’ version, which costs US developers US$1,199 (AU$1,143) but Australians AU$2,084. In all cases – even ranging down to basic access to Microsoft’s operating systems — the MSDN markup is around 82 or 83 percent.
A representative of Microsoft’s public relations agency was not immediately able to comment on the issue.
The issue of MSDN pricing was raised by a number of Delimiter readers following comments 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, and it has similarly not responded in the past week to Husic’s comments.
“Our prices vary by region and are determined based on a variety of market specific factors including, but not limited to exchange rate, local taxes, duties, local market conditions and retailer pricing decisions,” a Microsoft spokesperson told ZDNet.com.au in late 2009, upon the occasion of releasing Windows 7, with similar markups, in late 2009.
Microsoft’s a great company, with some great products. I’m personally a staunch Windows 7 desktop user, and I use a host of other Microsoft products — Office 2007 (although I’m thinking of migrating to Office 365), its Xbox 360 console (including Xbox Live) and more. And I’m a big fan of what the company has done recently with its Internet Explorer 9 browser and Windows Phone 7 platforms.
In the corporate sphere, there is no doubt Microsoft is as dominant a player as you get in Australia. The company’s whole stack — right from Windows Server, to SQL Server, Lync, Active Directory, Office, Exchange, Azure and so on — is used extensively and is only getting more popular.
That’s why it’s so hard to understand why the company keeps on gouging Australians when it comes to pricing. Every time the company releases a new product or service, Australians know they are going to pay anything between 30 percent and 90 percent more for the exact same offering. Frankly, when much of what Microsoft produces is software, and much of its support is provided from locations such as India, there are few excuses for this kind of markup.
It could be that this is just a case of a lack of competition. Unfortunately, in many of the areas in which Microsoft plays in, competition is wilting right now before its unified product stack and ubiquitous ecosystem. If there was more competition for Microsoft’s products, the price may have to come down. Of course, that presupposes that the competition didn’t slap the exact same markup on its Australian prices that Microsoft does ;)
Image credit: Microsoft