Microsoft 365 Pricing Increases
If you’re not a fan of rising prices, we’ve got some less than stellar news. Microsoft 365 and Office 365 is getting a price hike. While this may not be welcome information, it’s important to remember that Microsoft is a business as well, and has to make money. While it’s not convenient, it is necessary. With that being said, here’s everything you need to know about the upcoming changes.
Microsoft Hasn’t Raised Prices On Their 365 Product In A Long Time
Microsoft has faced some stiff competition in recent years from the Google Suite. While Google doesn’t have the crisp, clear features of Microsoft, the lack of fees makes it an attractive feature. In spite of this, Microsoft has some extra little features that helped justify the prices it charged, especially since they weren’t exactly that high.
Microsoft first launched the 365 programs in 2011, and while it’s added a lot of new features, the prices have remained the same. In fact, Microsoft hasn’t increased the prices for over a decade, which is almost unheard of in the business world.
It wasn’t exactly a smooth transition since most people were accustomed to purchasing software that you got to keep for life. The idea that you had to pay a subscription fee that must be renewed once a year was a novel thought that wasn’t exactly welcomed.
Things have worked out, however, as more businesses have chosen to adopt this plan. It also helped that the prices weren’t that extravagant. In fact, depending on which plan you purchased, it might be even cheaper. It also helps that you get all the updates as they come out, and your software never truly goes out of date.
Even so, the news that prices are getting a bump isn’t exactly what everyone wants to hear. So why is Microsoft doing this?
Inflation Driving Up Costs Of Delivering Microsoft 365 Services
Everyone in the business world is feeling the pain from increasing inflation. There are a lot of reasons for this, and one of the biggest has been Covid. Many businesses were closed down either temporarily or permanently, and this has a wide-sweeping effect that has hit everyone.
It’s had a huge impact on everything from automobile purchases to airfare travel, to the prices of food and drinks. Rising gas prices means it costs more to transport goods, which in turn means that supplies are harder to come by.
The good news is that the government doesn’t expect this to last forever. Forbes Advisor reports, “The Fed has warned the public over these and other supply-chain issues, too, saying that it’ll take time for sectors of the economy to get back to normal. Once these kinks are worked out, the Fed asserts, inflation will stop growing so quickly. That’s cold comfort for families in the market for a used car, and consumers will need to be judicious with how they allocate their budget over the next few months. But weird price movements were an inevitable side effect of closing down the economy to quash the virus, so they shouldn’t be totally unexpected. Luckily, they’re likely to be short-lived though may persist while the Fed works to get people back to work.”
Even so, what does this have to do with Microsoft raising the prices of Microsoft 365 and Office 365? It’s not like they have physical parts that need to be installed. All you need to do is create an account, click a few buttons, and poof. You have Microsoft 365 or Office 365 on your computer.
While that sounds simple enough, there are still other factors to take into consideration, such as the programmers who design the software, customer service reps, the cost of equipment to build the programs, and more. It costs Microsoft to do all this, and with the rise in inflation, Microsoft is raising prices to make sure it continues to make a profit.
How Much Is Microsoft Planning To Increase 365 Fees?
When news hits that prices are going higher as opposed to getting lowered, it’s easy to imagine the worst. Some may feel a wave of annoyance, while others may fear that they’ll have to find a cheaper option. The good news is that Microsoft isn’t raising the prices that much. According to The Verge, the prices will be increased as follows:
- Microsoft 365 Business Basic: original price $5 per user, updated price $6
- Microsoft 365 Business Premium: original price $20 per user, updated price $22
- Office 365 E1: original price $8 per user, updated price $10
- Office 365 E3: original price $20 per user, updated price $23
- Office 365 E5: original price $35 per user, updated price $38
- Microsoft 365 E3: original price $32 per user, updated price $36
These prices are per month, and not per year, so you’re looking at anywhere from $72 a year to $456 per person.
Is The Microsoft 365 Price Increase Justified?
While the price increase may not seem like that much, it can quickly begin to add up, especially if you need to purchase multiple subscriptions. For example, if you have five employees that need the Business Premium, it’ll cost you about $1,320 per year. On the other hand, if you have twenty employees, you’re looking at $5,280. This is an increase from $1,200 for five people and $4,800 for twenty.
That’s quite the price hike, especially if you have even more employees. Some may fear that the price increase may be too much and wonder if it’s really worth the money. Inflation isn’t just hitting Microsoft, after all. Small businesses are feeling the pain as well, and some may not have the wiggle room to adjust quickly during the Pandemic.
Microsoft makes excellent products, however, and the extra money is definitely worth what you’ll be paying for. It comes with features like cloud storage, Microsoft Teams, business email, applications that can be used across a wide variety of devices, and more.
For small businesses, these are all must-haves. Rather than purchasing multiple programs across a variety of platforms that may or may not work together, you can get it all with one package from Microsoft. There are a variety of plans, so there are lots of choices available to you.
If you’re not sure which is the right package for you or have other questions about IT problems, contact us today. We’ll help with all your It and security problems, so you can focus on running your business.