Microsoft Prices Set to Increase for Microsoft 365 and Office 365

As of March 1st, 2022, you will pay more for Microsoft’s Office 365 and Microsoft 365 subscriptions. Microsoft officials also confirmed that the prices for education, the highest-end Microsoft 365 E5 SKU, and consumers would remain unchanged. These price increases are the initial substantive pricing update ever since the launching of Microsoft 365 about ten years ago.

As a world-class IT expert, MainStreet IT Solutions will be glad to help you have a seamless transition once we get to this pricing shift. We are always committed to ensuring that all our partners leverage the highest benefits from Microsoft 365 services for them to be successful. We offer 24/7 online and onsite support and are always ready to listen to our customers and deliver services that suit their needs. Read on for more insights.

Microsoft Price Increases

What Price Changes Should You Expect?

The new prices for the SMB products as announced by Microsoft in August 2021 will be as follows:

  • Microsoft 365 Basic Business plan will increase from $5 to $6 every month for each user
  • Microsoft 365 Premium Business plan will go from $20 to $22 per month for every user

The new prices for the enterprise products will be as follows:

  • Office 365 E1 will increase from the previous $8 to $10 every month for each user
  • Office 365 E3 prices will increase be from $20 to $23 for each user every month
  • Office 365 E5 will go from a low of $35 to $38 every month for each user
  • Microsoft 365 E3 prices will also increase from $32 to $36 every month for each user

In addition to the upcoming price changes, Microsoft also said there are plans to add unlimited dial-in capabilities. This will apply in all Teams meetings across the paid business, enterprise, government, and frontline worker suites, allowing individuals to dial in and join a Microsoft Teams meeting regardless of the device they use.

What’s the Reason for the Price Increases?

Generally, the main reason for the increase in prices is the rise in value for Microsoft’s online services over the years. When Microsoft first launched Office 365 in 2011, there were seven available applications. Within the ten years, there has been an addition of 24 apps, including Power BI, Stream, Visio, Whiteboard, OneDrive, and Microsoft Teams. Also, there are over 1,400 features spread across the three main areas.

  • Security and compliance
  • Collaboration and communication
  • AI and automation

The value in these services has paid off as Microsoft recently reported an annual record rise in revenue growth attributed to cloud services such as Office 365. At the moment, there are more than 300 million paid seats for Office 365. This means that the price rises will significantly increase the profits and revenue further in the coming years.

The New Commerce Experience (NCE) Changes

Apart from the price increase in the Microsoft 365 suites, there will be a new billing model titled the NCE. The invoicing for the services under NCE will be in three options as follows:

Monthly Subscription

Under NCE, you will have an opportunity to pay for licenses on a month-to-month basis without necessarily having annual commitments. Still, you can decrease the license counts to make extra savings. Therefore, if you need to make regular changes to your subscription, the flexibility of the month-to-month subscriptions will suit you. You can decrease the number of seats or purchase more to meet your business’s fluctuating needs. Also, note that this subscription comes at a 20% premium on all the online service plans, which adds to the expected price increases.

Annual Commitment Plan

With this option, you will commit to a 12-month subscription through NCE. Under this plan, you will enjoy price protection from possible increases in costs over the 12 months. In case you need to cancel this subscription, make sure you do it within 72 hours or remain committed for the entire period. Also, note that you cannot decrease the seats within the 12-month term, but you can increase them with pro-rated billing.

Multi-Year Commitment Plan

Under this plan, you can secure a 36-month subscription that comes with price protection. Like the annual plan, you can increase the number of seats, but you can’t reduce them within the set duration. Again, you can only terminate your commitment after the 36-month term. You can still make purchases via the current CSP program until March 10th, 2022. Also, the seat changes can still occur in the existing subscriptions through your current CSP program up to June 30th, 2022.

Is It Possible to Lower or Maintain the Current Microsoft Prices?

There is a possibility that you can fix the current pricing for at least a year, but it will depend on your plan if you renew before the said date. Also, you’ll still have an option to make monthly payments. You can reach out to MainStreet IT Solutions for more details on how the upcoming changes may affect your licensing agreements and the best ways to make the most out of your current pricing.

Are There Any Exceptions?

These price increases will only affect business and commercial users. There will be no changes in prices for consumers and education subscriptions. For instance, the Microsoft 365 E5 that goes for $57 every month will remain unchanged. The Microsoft Corporate Vice President believes that maintaining the prices for Microsoft 365 E5 might make it more attractive.

Get in Touch with MainStreet IT Solutions to Help You Plan for the Change

With the scheduled Microsoft price increases, you now have less than three months to prepare to make the shift. You need to assess your current and future business needs to ensure that you make the most out of the upcoming changes. To be better placed in your industry, it would be good to consult the leading IT professionals at MainStreet IT Solutions to guide you through the available options and opportunities as part of the preparations for the announced changes.

You can rely on our knowledgeable and experienced Microsoft specialists to help you understand the changes and the available options that can help mitigate the price rises that will affect your IT budget. Our team will assist you in planning to optimally utilize your current IT resources and help you make valuable future investments. Reach out to MainStreet IT Solutions for more details.

Thanks to Donna and Emily at OnPar Technologies for their help with this article.

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