In the post covid era, businesses have witnessed a slowdown. The IT sector has also taken the blow of instability in the economy. Slowly and steadily after getting out of the slump, now resellers, or channel partners have come across the issue of sudden hikes in License prices by various big names in the IT industry.
Some of the names that are going to increase their licensing prices by next month –
Microsoft has proposed a hike of 6% starting from the 1st of February, 2024. They increased the prices last year as well, with the subsequent price hike making an impact on the business of channel partners.
Tally Prime is another name that is increasing its price by approximately 25% effective from the 10th of February, 2024 after a long gap of 10 years.
Coreldaw is going to increase their prices by 15% effective from the 1st of February, 2024.
Autodesk is also planning to hike their prices soon.
To understand the impact of this rise in license prices, DQ Channels reached out to some renowned channel partner associations across India.
Vinod Kumar, President, of the Infotech Software Dealers Association (ISODA) headquartered in Mumbai, Maharashtra, shared his views on the price hike, “Yes, there has been a substantial price increase in India by a lot of software vendors. We understand Microsoft has increased prices by 6% and there has been a substantial increase for TallyPrime too. The price increase has been on both offline as well as online services. This will affect the cloud partners in a big way as it will directly affect their operational costs making a dent in their profit margins. The sales cycle of the partners will increase as they have to put in a lot of effort now to relook at their selling price to the end users.”
“Since a lot of cloud partners bundle these services along with their other offerings, this increase will need them to reassess their overall pricing models of the solutions they offer. An alternate strategic approach would also be looking at other competitive solutions and embracing newer technologies. This will be required to stay competitive In the market. Our partners will also relook at their overall costs to improve operational efficiency by optimal resource usage and automating their processes.” Vinod Kumar concluded.
Alok Gupta, President, of Progressive Channels Association of Information Technology (PCAIT) shared his views,” Profits should not be compromised in case of a price increase. If the partner has quoted the order at the earlier prices, all the orders should be fulfilled in the same price limit even if the order is delayed by 90-120 days. The biggest challenge is because of sudden price increases resellers can’t change the price immediately as they have already quoted the price to the customers. If they demand higher prices then it leads to conflict with the customers. Price margin should be healthy margin for the partners and resellers.”
To know the impact of price hike in Bengaluru, the silicon city of India, DQ Channels reached out to B. Ananda Rao, President of the Association of Information Technology (AIT), Bengaluru, he shared his concerns, “It is sad & unfortunate that there is going to be a further hike on the prices of the products Tally Prime, Adobe, Microsoft, Autodesk, etc. Microsoft & Adobe pricing went through a steep rise in 2023 itself & there is News that there will be a hike in license prices in 2024 again. Our members at AIT express shock & disappointment at the proposed price hike of these products, as those selling these products face the threat of a steep decline in their business of new licenses.”
He further added, “Against the backdrop of the fact that the Industry is yet to recover to its full normalcy, post-Covid, Software dealers are yet to see good momentum in Business. As the SMEs & Enterprises have cut down the expenditure on IT Infrastructure & Software. We strongly feel that it is time for Software OEMs in general & all OEMs, in particular, to walk hand-in-hand with the partners at these tough times and refrain from price hikes for at least one year.”
Some of the partners shared with DQ Channels that their profits have already been reduced due to steep online competition. Subsequently, They are looking forward to finding a midway that can help them in maintaining their profits as earlier.
DQ Channels reached out to Microsoft on the rise in prices, Microsoft’s spokesperson in an official statement stated, “Microsoft regularly assesses the impact of its local pricing for software products and online services to ensure there is alignment across regions. These pricing changes are primarily due to currency fluctuations. We also took into consideration a range of factors including, inflation, macroeconomic events, and business conditions. A semi-annual cadence for these assessments enables greater transparency for our customers on the timing for pricing adjustments and ensures a clear and consistent approach to pricing.”
