Why are MSDN subscriptions less expensive in the US?

Question

The Economist famous Bic Mac index is an informal way of measuring the purchasing power parity between currencies.

Perhaps we should create the equivalent MSDN index. A Visual Studio Team System Developer MSDN Premium 1 year subscription (without taxes) costs:

• USA, $5469
• UK, £3670, $7256, 33% more
• EU, €5855, $9119, 67% more
• Norway, NOK 45287, $8821, 61% more

Answer 1

Call Microsoft and ask. There is a phone for MSDN.

Answer 2

Taxes, import duties, different perception of market value, exchange rate fluctuations

Also, Distributor.
We're using ArcGIS which is a GIS software. Here in Canada it costs 40% than it costs in the US mostly because you can only buy through the distributor.

Answer 3

@Kevin: There are no taxes and import duties in the Norwegian price anyways. The price listed is exclusive of taxes. Perception of market value, certainly. Or call it price differentiation. Their pricing seems a bit off though. Not sure that they actually maximize their profits by doing this.

@Stephen: Have done that, the price is what is they say apologetically.

@Amr: Distributors can not be the answer. It is actually more expensive to buy from MS online (which is possible in Europe) than from local distributors.

The best way to buy this MSDN thing if you happen to be outside the US is a 3 year software assurance subscription licence from a local reseller. In that case the price per annum is significantly reduced (but I guess this is also true in the US).

Answer 4

Sales volume, market size, and market penetration also affect price. I don't have any hard sales numbers (so I am speculating a bit)...

Since Visual Studio is a product built for the US-market and then modified for international markets, its cost would be higher in foreign countries. The unit cost would be US_unit_cost + (localization_cost / anticipated_units_sold). In addition, the cost of internationalization would probably be added to all foreign units, but not the US units.

This is all before exchange rates. Then sales volumes will affect the per-unit cost of internationalization/localization.

Add to that simple economics--a product will sell for the highest price the market can bare. Is the competative landscape different in Europe? Does Microsoft perceive Europe to be a "growth" marketplace? Who are they competing with?