You may recently have read that Microsoft has signed a new three year deal with the Australian Government to provide software, services and maintenance to numerous Government agencies. Microsoft welcomes this Volume Sourcing Agreement (VSA), which demonstrates our commitment to the partnership with the Australian Government as it strives to deliver on its goal of transforming Australia into a world leading digital economy. In particular, VSA II includes new provisions that enable access to Microsoft’s suite of online services that will in turn help drive the Government’s cloud strategy. We’re excited to be partnering with the Australian Government during this period of digital transformation. You may have read some reports linking the agreement with the Parliamentary Inquiry into IT Pricing of Consumer Software and Hardware. Procurement by a customer that has hundreds of thousands of employees – such as the Australian Government – is very different to a retail or consumer scenario, and just as in any business there are discounts for volume purchases. The agreement is based on a volume sourcing arrangement that is common among large customers. We agree terms based on the strategic needs of the customer and the scale and scope of their purchasing. As we have previously outlined, Microsoft does not set global pricing so prices in other jurisdictions were not a consideration in this agreement, or in any other we enter into. Microsoft also does not adjust its pricing with the fluctuation of the exchange rate because our customers have told us that they value consistent and predictable pricing. Therefore when the dollar loses value against the US dollar as we have seen in recent weeks, Australian pricing becomes lower comparable to the US dollar. We are pleased that the Australian Government values its partnership with Microsoft and has chosen to continue using our platform across its agencies.
Pip Marlow, Managing Director, Microsoft Australia