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Software prices rise 8-10 per cent

Software companies say this is a direct result of the depreciation of the rupee against the dollar.

Lotus has increased the prices of its products by 8 to 9 per cent. Microsoft and Oracle tags have gone up by roughly 7 per cent hike.

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Since most software packages are imported they are not priced in rupee terms. They are priced in dollars. Which is multiplied at the current exchange rate explained Lotus Business Development Manager Sandeep Mathur.

"Earlier, the factor was about Rs 38 to a dollar. Now, after the sharp depreciation of the rupee, it is about Rs 40," pointed out a Microsoft source. He added that the companies release only a suggested retail price, which is not to be strictly enforced.

One of the major reasons for the sharp increase in prices is the thin operating margin. Add to that the margins of the dealers and resellers, which leaves no scope for absorbing the increase in costs, companies claim. Analysts say that margins in software products are as low as 5 to 6 per cent, which includes margins of the companies, their dealers and resellers.

While India is a major exporter of software and software solutions, these are essentially customised software and not software packages, which have to be imported, an industry analyst pointed out. Software like operating systems, application packages and communications tools are not made in India. They are typically imported and are affected by external forces.

- Compiled from the Indian media

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