Technology giant Microsoft has announced a hike in prices of its commercial on-premises software and online services, which include Microsoft 365 and Dynamics 365, in India by 6%, effective from February 1.

This marks Microsoft India’s third consecutive year of price increase amid a challenging global economic pressure. The move is to align pricing between India and the Asian region, the company said in a statement.

“Starting February 1, 2024, Indian rupee prices for commercial on-premises software will increase by 6%, online services will also increase by 6% to realign close to prevailing USD pricing levels in the Asian region,” the statement said. 

“On Microsoft.com, revised Indian rupee prices for direct sales to India based customers for a select set of online services such as Microsoft 365, and Dynamics 365 will be reflected as of February 1, 2024.  For business customers, these changes will not affect existing orders under volume licensing agreements for products that are subject to price protection,” it added.

Amid a surge in adoption by small and medium-sized enterprises (SMEs) during the pandemic, Microsoft India increased prices by 20% in February 2022, marking the first hike in nearly a decade. 

Subsequently, in February this year, prices were raised by an additional 11%, showcasing Microsoft’s focus on leveraging its increased user base in India amid global economic challenges and a slowdown in cloud adoption. 

These successive price increases may impact small businesses and SMEs with constrained technology budgets that recently embraced Microsoft’s services for digitisation.

Microsoft India’s operating revenue stood at INR 19,229.4 Cr in FY23, a 1.2X increase from INR 13,819.5 Cr in FY22.

Its net profit rose 30% to INR 648.6 Cr from INR 498.2 Cr in the previous fiscal.