Microsoft Price Increase Coming March 2022
Several Microsoft 365 plans will see a per-user price increase ranging between 8% and 25% by March 1, 2022. This is according to a blog post posted on August 19, 2021, by the corporate vice president for Microsoft 365, Jared Spataro. Another significant change will be the increase of monthly subscriptions over annual subscriptions as well as the removal of users’ ability to downgrade their license to the next cheapest plan. Continue reading to learn more about Microsoft’s planned price hike.
Which Microsoft Plans Will Increase?
Microsoft announced price increases for 6 of its plans; 4 in Microsoft 365/Office 365 enterprise categories and 2 in the Microsoft 365 business category. What differentiates these two categories is the user limit – the business category can support up to 300 users – on the other hand, the enterprise plan can host an unlimited number of users.
Here is an outline of the planned price increases in each of these categories:
Microsoft 365 Business
- Microsoft 365 Business Basic: $5 to $6
- Microsoft 365 Business Premium: $20 to $22
Office 365/Microsoft 365 Enterprise
- Office 365 E1: $8 to $10
- Office 365 E3: $20 to $23
- Office 365 E5: $35 to $38
- Microsoft 365 E3: $32 to $36
What Is Microsoft’s Reasoning for the Price Increases?
The March 1, 2022 price increase will be Microsoft’s first major price change in over a decade. And perhaps rather transparently, Microsoft’s announcement majorly focused on the solutions added to its suite over its lifespan – it generally had little to do with the actual price increase.
Since the introduction of Microsoft 365, 24 apps have been added to its suite, including Power Apps, Microsoft Teams, Power Automate, Power BI, Stream, OneDrive, Planner, Vision, Whiteboard, and Yammer. Moreover, over 1400 new features for collaboration, security, compliance, and automation have also been added to enhance the user experience.
While most people don’t fancy the price increase, one potential positive caveat from the price hike is that Microsoft will continue paying attention to the value its lower-tiered licenses deliver. Additionally, the company will continue to enhance these tiers and safeguard them from ever-evolving cybersecurity threats.
Which Microsoft Plans Haven’t Been Affected by the Price Change?
According to Jared Spataro’s blog, individual consumer and education plans won’t be affected by the price increase. Even so, there’s a possibility that there may be future announcements of changes to these plans if the language used in the blog is something to go by.
A couple of other enterprise and business licenses and tiers were also exempted from the list. These include the frontline workforce plans, Apps for suites, and Microsoft 365 E5 (the most expensive subscription). This aligns with Microsoft’s efforts to upgrade Microsoft 365 into a more hybrid-workforce supportive solution, especially since the services that have been expanded (voice, data security, dial-in, analytics, and more) greatly enhance the value for fluidly distributed teams.
Discounted Pricing for Multi-year and Annual Licenses
One of the positives about Microsoft’s price change is that there are discounts for multi-year and annual agreements, during which per-user agreements will be locked.
Month-to-Month Subscription Price Will Increase
As opposed to annual licenses, month-to-month subscriptions will see an increase in price. Microsoft is instituting additional price changes for month-to-month subscriptions of up to 20% more.
A month-to-month 500 user license for Office 365 can go from $500 to $6000, while Microsoft 365 basic subscription for 5 users will go from $30 to $36 per month. As of now, Windows 365 SKUs will only be available for month-to-month plans but, fortunately, won’t be subject to the 20% pricing add-on.
Understanding the New Commerce Experience (NCE)?
Microsoft’s new commerce experience went into full effect earlier in January. Microsoft launched NCE with the intention of reducing complexity and providing cost-saving for long-term commitments while introducing new features to make cloud solution provider programs a comparable alternative to the longstanding enterprise agreement.
NCE is a little bit trickier than the price increase model that we have discussed above, even though they do stack in some cases. NCE affects all cloud products for Office 365, Microsoft 365, Dynamic 365, and power platforms in that customers must evaluate how they want to transact these products in the long term. Among the options (taking effect June 30, 2022) customers can consider include:
- You can continue with the month-to-month subscription for these products. Even so, there’s a premium for this level of flexibility. There will be a 20% price increase on these products. To add to that, this premium will be on top of the planned price increase for Office 365 and Microsoft 365 plans mentioned above.
- Users can commit to a multilayer or an annual agreement for specific products instead of paying month-to-month subscriptions. Some of the things you should take note of if you commit to the annual or multilayer subscription include:
- You won’t be subjected to the 20% price increase.
- You have the option of paying upfront or paying off the commitment on a monthly basis. Either way, you’ll be responsible for paying the commitment even if you attempt to cancel early.
- You will be price-locked for those products provisioned during the term of your commitment.
- Your partner for the subscription cannot change during the term of the commitment.
- You are allowed to increase license counts at any time. Nonetheless, you can’t reduce the license count until the expiration of the commitment duration.
- You are allowed to upgrade products in the committed plan at any point in time.
- Suppose you commit to the new commerce experience after June 30, 2022, you will be subjected to the price increase for the six Microsoft 365 and Office 365 plans outlined above.
Network Security Associates (NSA) Is the Go-to Microsoft Provider
Do you need help understanding how Microsoft’s price increases will affect your business? NSA can help. We are a top Microsoft partner that services businesses in Las Vegas and Henderson. With us, you’re guaranteed that you’ll be getting the most out of Microsoft 365. Reach out to us if you have any questions about Microsoft’s price changes or our services.