Microsoft to roll out INR pricing for dealers from May 1

DQW Bureau
New Update



will enable Indian Rupee

billing to all India distributors effective from May 1, 2011. The INR

billing will be applicable for all Volume Licenses (VL) and Full

Packaged Products (FPP). This step has been taken to address the

challenges of Forex fluctuation and enable better business

predictability. Apparently, Microsoft's national distributors have

already communicated to its software fraternity and given the

cut-off date of April 28 to place orders in the USD format. Wh i l e

interacting with one of the national distributors of Microsoft, Irfan

Darvesh, product manager Microsoft, Ingram Micro India said, “We

would be moving to a new Microsoft INR pricing model, however there

is an expected increase of 8-9% on the pricing as compared to the

current pricing. Effective from May 2, 2011,

Ingram Micro India will be releasing its price list, based on the

price list of Microsoft. All orders from May 02, 2011 are to be

released on the basis of the new price list. However, the principal

company would continue to bill from Singapore, using Indian Rupee as

the currency. The rest of the process remains the same in terms of

TAT, weekly shipments from MS- ingapore, customs clearance and other

formalities.” When asked what response have they received from

their dealers, post this announcement, Darvesh said, “As of now

dealers are upset with the hike in the pricing by 8-9%. We assume

government deals which are in the pipeline will be impacted due to

sudden increase in the pricing. However, we are educating our

partners and telling them how to deal with this short term

disturbance, but we feel that things will be better and stable, once

the new policy rolls out.” Rajesh Goenka, VP-sales and marketing,

Rashi Peripherals said, “We feel the new system will make prices

more stable and consistent across the country. Therefore, channel

partners and end-users will benefit


However, when The DQ Week contacted

Microsoft, the spokesperson o f the company refused to comment about

the issue and said that Microsoft will only give its comment in the

coming week. To get the perspective from software reseller community,

The DQ Week spoke to software dealers, and majority of the dealers

have welcomed the INR billing system, but were irked with the price

hike. De v e s h Ag g a rwa l , president, Infotech Software Dealers

Association (ISODA) said, “ISODA had been complaining to Microsoft

for the last 6 quarters, that there were daily fluctuations in the US

dollar rates and we asked the principal company to fix a rate for 1

year and stick to it, so that daily rate fixing and rate quotation

could be avoided. Already, other software vendors like IBM, Oracle

and Adobe has been following Indian Rupee pricing. Although we

welcome the new system, which will stable the dollar rate

fluctuation, but we are not accepting 8-9% increase in pricing as per

distributor communication. We are talking to Microsoft for the roll

back of price increase, we can accept price increase between 4-5% but

not beyond that. Moreover, we want clarity on price validity which

should remain for 1 year.” Agreeing to Aggarwal, Delhi-based Kavita

Singhal, director, Kamtron Systems, who is a Microsoft dealer said,

“We (channel partners) had been waiting for INR pricing to come in,

but the way it has been incorporated is not acceptable for us. As per

the new system, the company has over assumed the value of dollar

fluctuation and fixed the value of USD at Rs 50, this is almost like

10%, because the current dollar rate is about Rs 45 plus. In the

current dollar format, we have a scope to negotiate with the

distributor and offer best price to the customers, but with the new

system, the price will shoot up by 8-9%. Hence in this scenario how

would we justify the price increase to the end customers.”

According to Rajesh Kothari, chairman,

ISODA, “The move is in the right direction, but there are several

ambiguities. However this will bring price uniformity and

standardization which has been creating lots of confusion among the

channel, but there is still to understand the terms and conditions

attached to this new systems. Instead of increasing the price, the

company should have followed MRP systems.” Similarly,

Ahmedabad-based Binit Shah, director-license software division, TM

Systems said, “We are completely against this new billing system.

This will badly hit the sub-distributors. If things doesn't get

stabled in the coming times, we have to look for new business.” On

the other hand, Saket Kapur, general secretary, PCAIT said, “INR

pricing will make the market more stable. One should look at this

move for a long term benefit. The company has set a benchmark for

dollar. With this, we can predict our business in a better way.”