The new pricing comes into effect in March 2023
Microsoft has announced that its Office 365 products and its Microsoft 365 Services are set for a price increase in early 2022. This price increase will affect both commercial and business users of the software, while no pricing changes are expected for its education or consumer packages.
At this point, exactly how the price increase will look for UK customers is not 100% certain, but what we do know is that this is how the prices will look for US users, and this more or less gives us an idea about what to expect:
- Microsoft 365 Business Basic (from $5 to $6 per user)
- Microsoft 365 Business Premium (from $20 to $22)
- Office 365 E1 (from $8 to $10)
- Office 365 E3 (from $20 to $23)
- Office 365 E5 (from $35 to $38)
- Microsoft 365 E3 (from $32 to $36)
Although there is never a good time for prices to go up, the company, which launched Office 365 back in 2011 and has been consistent in its maintenance and development ever since, decided that 2022 would be the year that the first substantial price increase would be introduced.
Whispers in the industry say that the price increase is due to global inflation, but all Microsoft has to say about the increase is that it is to reflect the value, through developments and product innovation, that clients have been provided with over the last decade.
Breakdown of Contract Options
From March, Microsoft will be encouraging clients to sign up for a 1- or 3-year contract, but there will continue to be a month to month option, which remains as popular as ever.
Microsoft breaks down the contract options as follows:
Contract Option Number 1 – Ideal for Small and Medium Businesses
The first option is to go the per month route. With a monthly contract, you will have more flexibility in terms of being able to scale up or scale down your package and your services, based on your needs. Because of the flexibility and since clients pay on a month to month basis, this option does give them more control over their business budgets. This flexibility and control come at a cost as month to month pricing will be around 20% higher than the annual offer.
Contact Option Number 2 – Ideal for Medium Businesses
The next option is to make a yearly commitment. This kind of contract, though not the most flexible, does allow you to avoid the further price increases. Clients opting for the annual contract will be able to either pay for the year upfront or they can pay on a monthly basis. Regardless of their payment option, the price will remain the same.
Contract Option Number 3 – Ideal for Large Businesses and Corporations
Finally there is the three year commitment. This option is expected to be the most affordable option, ideal for those bigger companies who need the Office software and Microsoft services and are looking for a fuss free way to get the admin, i.e. the payments, out of the way, while also saving money, especially since the bigger companies tend to have more licenses.
There are a variety of ways that customers will be able to mix and match their packages, in order to get the maximum amount of value for their money.
In the coming months, before the increase comes in, we will be getting into contact with all of our clients to discuss how these increases will affect them, and what the best steps to take will be. We will still be allowing our clients to pay for their Microsoft 365 subscription on a monthly basis, to continue to help our clients to be more flexible with their finances.
Should you have any concerns or questions about what this price increase will mean to you, you can give us a call or read the official Microsoft Press Statement.