Get some perspective on IT pricing, says licensing expert

Software specialist Filipa Preston has weighed in on the IT pricing debate, saying although prices are in most instances too high, many of the figures quoted during last week’s parliamentary inquiry were “not representative of the reality.”

Preston is CEO of Software Optimisation Services, a Perth consultancy that specialises in software asset management.

Although there is no justification for excessive prices for software and digital services in Australia, “we need to keep a sense of perspective”, Preston said.

Preston argues that the 66 per cent price delta between Microsoft products in the US and Australia – quoted by committee members at last Friday’s hearing – was “unrepresentative and unfair on Microsoft.”

“For a start, the 66 per cent figure relates to one specific suite of products and not the company’s entire product line,” she said.

“It doesn’t match my own experience either; in my two decades of helping firms optimise their software spend, I have found the difference in prices to be closer to 30 per cent. Still an unacceptable hike but nowhere near the 66 per cent figure,” Preston said.

Software Optimisation Services is a Microsoft partner with “Gold” status.

Preston’s willingness to defend Microsoft Australia’s pricing policies is not shared by at least one other Microsoft channel partner.

During last Friday’s inquiry, Labor MP Ed Husic read through an anonymous email he received from a Microsoft channel partner, indicating the company was paying 50 per cent more for identical digitally distributed Microsoft software in Australia than the US.

Preston highlighted that criticisms appear to focus on retail or packaged versions of vendor software and it is “unlikely that the high figures quoted refer to volume licenced versions of the software.”

“Physical, packaged software has to be shipped, so it will incur higher shipping costs that all products imported into Australia are subjected to; this will inevitably be reflected in the retail price,” she said.

Preston also argued that the pricing debate “fails to point out” that in some instances, software in Australia has been found to be cheaper than in other countries such as the UK.

“Pricing is not uniform around the world and global markets are imperfect, so it’s worth bearing in mind there are discrepancies in both directions,” she said.

The IT pricing enquiry was established in May last year to examine if there was a pricing disparity between Australian pricing for hardware and software and other digital goods and prices in the US, United Kingdom and the Asia-Pacific.