FAQ: Microsoft 365 License Price Increase

Effective Date: April 1, 2025. What you need to know about the upcoming Microsoft Price Increase.

What is changing with Microsoft 365 license costs?

Microsoft is pushing subscribers toward annual subscriptions where prices remain the same. Only the monthly billing option will see the 5% bump.

Monthly Billing: This means customers commit to an annual term subscription for a product, but instead of paying the entire amount upfront, billing will occur each month on the day after the coverage start date.

Annual Billing: This means customers commit to an annual term subscription for a product and paying the entire amount upfront without the 5% Microsoft Price Increase.

Microsoft seeks to standardize the billing structure for consistency and transparency across all purchasing platforms > buying Online, through a CSP (like us), and Microsoft Customer Agreement (MCA-E).

Which services are affected by this price increase?

• Microsoft 365
• Office 365
• Enterprise Mobility + Security
• Windows 365
• Microsoft Dynamics 365 Services
• Microsoft Power Platform
• Other Online Services

Other services include:

Microsoft Teams Phone Standard will move from $8.00 to $10.00. This will be the first price increase for Microsoft Teams Phone standalone plans since their inception.

Power BI Pro will move from $10.00 to $14.00

Power BI Premium Per User will move from $20.00 to $24.00

How can you avoid the 5% price increase?

Customers who want to keep their existing pricing may choose to switch from monthly billing to annual billing with upfront payment for their annual term subscription at their renewal date.

Co-Pilot offered as monthly billing.

Starting on December 1, 2024, customers who purchase annual term subscriptions of Microsoft 365 Copilot, Microsoft 365 Copilot for Sales, and Microsoft 365 Copilot for Service will have the option to pay on a monthly basis instead of making an upfront annual payment. The monthly billing option for annual term subscriptions of Copilot will be priced 5%* higher than the annual billing option.

Teams is being removed from suites to purchase separately as of April 1, 2025. What happens to existing Office 365 E1/E3/E5 and Microsoft 365 E3/E5 suites?

Microsoft is aligning their offerings globally, which saw Teams being sold separately. Customers who are currently subscribed to any of the suites involved will have new options. They can continue to use, renew, upgrade, and add seats to their current plans as usual. Or, if they wish to switch to the new lineup, they can do so on their contract anniversary or renewal.

New users will need to purchase two licenses. Microsoft or Office 365 (no Teams) and Microsoft Teams Enterprise.

Microsoft Teams Enterprise provides meetings, chat, calling (VOIP), and collaboration without any limitation on seat numbers and a 1000-seat cap on meeting attendees.

Microsoft Teams Essentials remains unchanged; it provides meetings, chat, calling (VOIP), and collaboration for customers worldwide with up to 300 users, with a 300-seat meeting attendee cap.

What should customers do to prepare for these changes?

Customers should review all current Microsoft License and understand your teams needs to understand how the Microsoft Price Increase will impact your organization.

Learn more at:

Flexible billing for Microsoft 365 Copilot, Pricing updates for annual subscriptions & Teams Phone | Microsoft Community Hub

Realigning global licensing for Microsoft 365 | Microsoft Licensing Resources