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Microsoft To Introduce Rupee Billing In India


5 Aug 2011
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Software giant Microsoft is introducing rupee billing for its distributors from May 1, 2011. It will introduce a single rate card for all the six distributors in India namely Ingram Micro, Redington, Compuage, Neoteric, Rashee Peripherals and IT Soft.

While introducing the rate card, the distributors would cover the mark-up for the fluctuating dollar rates, and this in turn would in turn translate into an eight to nine percent price rise of the software.

This means that the buying pattern will be based on the Indian Rupee price list and there would be no mention of day’s exchange rates and price changes on account of exchange variation. Prices are subject to change only basis intimation from Microsoft to the distributor.

“The company has also covered the forward cover (dollar hedging) which let to discrimination between prices by different distributors. The new policy is good for business because it would lead to uniformity in pricing, and applies to all Microsoft products,” said Devesh Aggarwal, CEO, Compusoft, a Mumbai based Microsoft partner.

He said that Microsoft has been releasing the price list in dollars for the last many years. And since the dollar rate fluctuates every day, the price would increase or decrease by the time partners would place the actual order because of changes in the exchange rate.

Paresh Shah, Partner, P.H. Tecknow, another Mumbai based Microsoft partner, while welcoming the move said that the strategy would make the partner aware of the base price for every month. “Orders would have to logged in each month. Infact, we had asked for a stable pricing for a year, instead of monthly rate cards. But Microsoft wants to review the strategy, and may agree to a stable rate card in another two to three months.”

“Microsoft bills its Dynamics partners in rupee for Navision and other products for the last five years. Our argument was that if you could bill Dynamics partners in INR, why not other products?” Aggarwal asked.

Shah informed that the price-rise would also have a bearing on the end customers. “We would have to pass on the increased rate to the end customers. The impact could be short-term till there is more clarity and the process is streamlined.”

Distributors on their part are sending mailers to the partners informing them about changes. Redington, one of the national distributors said in a letter, “The INR billing will be applicable for all volume licensing (VLs) and FPP (Full Packaged Product Licensing). We are happy to share that this INR billing model would address the challenges on exchange fluctuations and enable business predictability.”

Meanwhile, Microsoft would continue to bill from Singapore to its distributors. Distributors also clarified that the taxes would continue to be the same (until further notification from the government), and that the turn around time from procuring to delivering the license would also remain the same.

source : crn
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