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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
more.”
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.”