UK Council Calls Microsoft's 15% Price Hike "Blackmail"

Microsoft has come under fire in the UK after Warwickshire County Council revealed that its software licensing costs could increase by 15%, adding approximately £375,000 to its annual bill.

According to Warwickshire World, the increase would bring the council’s annual Microsoft licensing costs to around £3 million. Former council leader Rob Howard has accused Microsoft of “blackmail,” arguing that the council has little choice but to accept the higher prices.

Council says it cannot realistically move away from Microsoft

The Reform UK-led council has approved a procurement process to renew its Microsoft software licenses, which expire in May 2027.

Howard, a Reform UK councillor and former council leader, criticized the expected increase but acknowledged that switching to an entirely different software ecosystem before the deadline would be unrealistic.

He warned that the council’s dependence on Microsoft’s products leaves it vulnerable to further price increases, with limited options to negotiate or move to competing platforms.

Council officials also warned that delaying the procurement process could disrupt essential digital services and result in less favorable commercial terms.

The dispute comes as UK regulators are scrutinizing Microsoft’s dominance in the business software market.

Warwickshire considers alternatives to Microsoft software

Despite moving ahead with the renewal process, councillors have discussed ways to reduce their long-term dependence on Microsoft.

Howard suggested reviewing alternative operating systems and software platforms that could initially run alongside Microsoft’s existing products before potentially replacing them.

Green Party councillor Keith Kondakor also criticized subscription-based software licensing, arguing that organizations increasingly depend on recurring payments rather than owning their software.

Kondakor pointed to France as an example, where authorities are looking to replace Windows with Linux to reduce their reliance on Microsoft. Switzerland is also considering a similar move, with plans that could see 3,000 government PCs switch away from Microsoft 365.

Microsoft licensing agreement is not yet finalized

Warwickshire County Council has only approved the start of the procurement process, meaning it has not yet signed a new licensing agreement.

The final contract will depend on whether its cost fits within the council’s available budget. Officials are also exploring ways to cover the additional £375,000 in expected annual spending.

For now, the council appears likely to continue using Microsoft’s software while considering alternatives for the future.

Separately, Microsoft recently dropped a UK AI data center project over power shortages.

Via Neowin