Expect software price increases in South Africa

The weak rand means that South Africans can expect to pay more for software products in the future.

By - January 14, 2016 Share on LinkedIn
Rand Dollar Notes

The weak rand is likely to lead to price increases on software products in South Africa, which will hurt consumers and businesses.

The rand weakened from R11.50/US$ in January 2015 to around R16.50 in January 2016, which means that the price of imported goods are rapidly increasing.

Software is not exempt from this trend.

Riaan Badenhorst, Managing Director of Kaspersky Lab Africa, said the current economic situation and weaker rand is something they will continue to monitor for future decisions around pricing.

“It does take some time to evaluate the impact that such fluctuations of the exchange rate will have,” said Badenhorst.

Leane Hannigan, Cloud Solutions Director at Westcon-Comstor, said the weaker rand is likely to have an impact on the price of Adobe’s software products. This, in turn, will impact software revenues.

“In line with new business, those customers who never had the Adobe products before will view these as a “nice to have” rather than a necessity, and we will see a complete decline in new revenues,” she said.

Renewals will also be impacted. “Renewals have to happen contractually. However, businesses will now need to go through a new approval process to secure additional budget, which will delay renewals by a month or two at the least,” said Hannigan.

She said upgrades will also become a “nice to have” option, and customers are going to adopt a “wait and see” approach.

“My view is that price increases will impact upgrades, in that customers will also look at it in the line of ‘it works, why upgrade it?’,” she said.

Microsoft South Africa failed to directly answer the question on whether the weak rand will impact its software prices. Instead it provided the following statement:

Microsoft serves customers all around the world, taking into consideration local market conditions, taxes, tariffs, and exchange rates, while offering our customers the best value possible.

More on the weak rand

What your salary is really worth: Rand vs US Dollar

Rand hits R17.99 to US Dollar

The rand could fall to R19/$ – economist

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