Microsoft Prices Have Increased. How Will It Impact Your Business?
The Microsoft price increases are here, but not to worry. As your technology advocate, Accurate Computer Solutions has you covered with everything you need to know. So take a deep breath; it’s time to dive in!
It’s been more than a decade since Microsoft raised rates for Office 365 and Microsoft 365, but as of April 1, 2022, prices have increased worldwide. During the past 10 years or so, Microsoft used their static prices as an incentive for companies to move their data to “cloud only apps,” much like wireless companies did in the early days of cell phones. Now, we’re officially in the 2020s; living with the post-Covid reality of remote work and (thanks to high speed internet), the ubiquitous cloud app. In short there’s no longer a need for Microsoft to provide the same type of price break we enjoyed for so long. Add inflation into the mix and you’ll see Microsoft increasing rates across the board, regardless of whether you buy direct (retail) or via a reseller like your IT services provider (MSP). We expect Microsoft to provide additional updates and details soon, but for now, here’s what we know.
Increases
Initial increases will vary by product, although you should expect an initial increase of 10%+ across the major (and most popular) products. Lower rate increases will be targeted toward the higher-end products. It’s important to note these increases aren’t negotiable, unless you’re willing to switch to a competitor, e.g., Google.
We’re still waiting for Microsoft to share a detailed pricing list for all their products, however, we do anticipate the remaining price increases will fall within the percentage range listed above. In the meantime, here’s a breakdown of products with immediate price increases:
Enterprise SKUs:
Office 365 E1 is increasing to $10 per user per month (PUPM) from $8 PUPM;
Office 365 E3 is increasing to $23 PUPM from $20 PUPM;
Office 365 E5 is increasing to $38 PUPM from $35 PUPM;
Microsoft 365 E3 is increasing to $36 PUPM from $32 PUPM.
SMB SKUs:
Microsoft 365 Business Basic is increasing to $6 PUPM from $5 PUPM;
Microsoft 365 Business Premium is increasing to $22 PUPM from $20 PUPM.
Subscriptions
Those opting to purchase a monthly subscription will be subject to a 20% premium as of July 1, 2022. This is in addition to the 10%+ price increase referenced above. However, a monthly subscription can provide a business with much needed flexibility. For example, month-to-month licensing is helpful for businesses with high rates of employee turnover or for those who frequently utilize contractors. You may also want to consider a monthly subscription if your business is going through an expansion.
If you’d prefer to avoid the 20% premium you may do so by committing to a 12-month license term. This annual term can be paid via monthly installments, but be aware you’ll still have to pay for the full number of licenses included in the initial commitment, whether you need them or not. If this is a deal breaker for you, it’s better to pay the extra 20% and consider it a trade-off for flexibility. Non profit pricing increases that are slated for September will be covered in another blog post.
More to Come…
As Microsoft releases additional info, we’ll be sharing all the updates with you.
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