IBM Increases Software Prices, Impacting German Businesses

In the past decade, the cost of IBM software has surged significantly, outpacing inflation and imposing financial strain on the German economy. A recent analysis conducted by IBM's partner firm Bücker reveals that from 2015 to 2025, prices for IBM software have escalated by nearly 80%. The most substantial hikes occurred in the last three years, with a staggering 24% increase in 2023 alone, followed by 6% increments in both 2024 and 2025.

When comparing these figures to the general inflation rate in Germany during the same period, which fluctuated between just over 2% and nearly 6%, the disparity becomes evident. Since 2022, software prices have risen by 50.8% compared to a mere 12.3% increase in the overall price level, highlighting a gap of more than 38 percentage points.

Despite a decline in overall revenue, IBM has managed to maintain high profit margins. In the previous year, the company reduced profit margins for its sales partners in maintenance contracts by one-third, further intensifying financial pressure within the IT channel. However, the company's stock has shown remarkable performance, climbing almost 70% to reach $250 over the last decade. While IBM faces declining revenues and substantial investments in artificial intelligence software, its profits remain robust, amounting to approximately $6 billion.

This pricing strategy is not unique to IBM; competitors have adopted similar approaches. For instance, Microsoft recently raised the prices of its Office subscription by 30%, and both Adobe and Oracle have also increased their software prices.

The implications of these price increases are significant for the German economy. Companies utilizing IBM's software, as well as its partners, are forced to factor in higher IT costs, which may result in increased prices for consumers or reduced profits for businesses. Switching to alternative providers is often not feasible due to the high migration costs associated with such changes.

From a macroeconomic perspective, the disproportionate rise in software prices leads to imported inflation. This results in billions of euros flowing from Germany to the United States annually, benefitting U.S. corporations while local businesses grapple with escalating operational costs and diminishing competitiveness. The German federal administration has also contributed to this trend by increasing its expenditure on Microsoft licenses.