Price rises for Microsoft 365
We provide an overview of the forthcoming price rises for Microsoft 365 and explain some of the reasons behind these rises. In August 2021, Microsoft announced price rises for its 365 plans to take effect from 1st March 2022. This was subsequently delayed to the end of March. We provide an overview of the price rises for Microsoft 365 and explain some of the reasons behind the rises.
Why is Microsoft increasing its prices?
This is the first time that Microsoft has increased its prices since the launch of Office 365 more than a decade ago. Office 365 was first launched in 2010, and since then has become the service of choice for many organisations. Since its launch, Office 365 has been regularly updated, with more than 1,400 new tools and features added to the service. The Microsoft 365 subscription service has also expanded in scope, with 25 new programs added since 2017. Some of these apps have been included for no additional cost, such as Teams. Others, like the Power Platform family of products, require separate licenses and subscription fees. These functions all come at a cost to develop, implement, and sustain. As part of the service, the applications are regularly updated to provide you with the latest functionality. Microsoft has also invested billions into their public cloud solution, which ensures that the platform is secure, robust and reliable. Microsoft has managed to keep their costs low for a sustained period, during a time in which other providers have raised their prices. We believe a Microsoft 365 subscription still offers excellent value for money to businesses. From April 1, Microsoft is announcing new subscription terms and prices, which will affect the pricing for Microsoft 365 services. The updated prices reflect the value added to the Office 365 platform over the years.
What do the price rises for Microsoft 365 entail?
UK prices have yet to been confirmed, however the price rises will affect the following:
- Microsoft 365 Business Basic
- Microsoft 365 Business Premium
- Office 365 E1
- Office 365 E3
- Office 365 E5
- Microsoft 365 E3
The new price rises will range between 9% to 25%. Pricing for consumers, education and the highest-end Microsoft 365 E5 SKU are currently exempt from the price rises. As part of the changes, a number of products will also become annual only products:
- Exchange Online Plan 1
- Exchange Online Plan 2
- Azure Active Directory Premium P2
- SharePoint Plan 1
- SharePoint Plan 2
- Exchange Online Archiving for Exchange Online.
- Dynamics Products
Microsoft will also enforce annual commitments so that monthly contracts carry a different price. This means that monthly contracts will work out slightly more expensive than annual contacts. They do however continue to provide the greatest flexibility, allowing you to change user counts and licenses at any point.
Summary
Microsoft 365 brings an array of productivity features and is still one of the best software investments for businesses. For more information, read our blog on The Benefits of the Modern Workplace. For more information on the price rises by Microsoft or to discuss how this might affect your business, please get in touch.
