Microsoft Price Increase

Microsoft announced their first significant increase in price for Microsoft 365 Business and Office 365 Cloud Services in over a decade.  Microsoft notes the continuous innovation and growth of these products are driving the increase.  Innovations in communication, collaboration, security, compliance, automation and artificial intelligence are needed to match new operating models of organizations.   Presently, there are no price changes for Education and Consumer Products.

The new pricing structure will go into effect on March 1, 2022.

Microsoft services will increase in price as follows:

PRODUCT	Current Price Per User	New Price Per User
Microsoft 365 Business Basic	$5	$6
Microsoft 365 Business Premium	$20	$22
Office 365 E1	$8	$10
Office 365 E3	$20	$23
Office 365 E5	$35	$38
Microsoft 365 E3	$32	$36

In Addition to the Price Increase, There are Other Changes That are Important to Understand.  

1. These license are purchased as an annual commitment. If you change license providers, you will payout the annual commitment.
2. During the license year, you cannot reduce the number of users.  Any changes that reduce the number of users are made annually with the renewal of the subscription.  You can add user licenses at any time.
3. Cannot switch licensing partners mid-term.  You must payout the term and any changes occurs with the new term cycle.

These changes also include a new portal for Microsoft Partners to use to manage licensing.  Microsoft calls this the New Commerce Experience (NCE).  All licensing must be moved to this new platform by June 30.  The AME Group is doing this for our clients with no interruption in services. Any legacy licensing remaining after June 30 will expire and not auto-renew.  These legacy licenses will need to be renewed in the NCE for continued service.

To keep us on our toes, Microsoft also changed the name of some subscriptions –

Microsoft Business Essentials is now Microsoft 365 Business Basic

Microsoft Business Premium is now Microsoft 365 Business Standard

Microsoft 365 Business is now Microsoft 365 Business Premium

Benefits of the New Model Include

1. simplified contract to only 1 Microsoft Customer Agreement 
2. billing aligned to calendar month
3. simplified conversion from trial to paid licenses

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Annual vs. Monthly

Monthly, no commitment

1. monthly term
2. available with a 20% premium on the price compared to 1+ year commitment
3. no price protection
4. can increase # of license
5. can decrease end of month (not mid-term)
6. can upgrade products mid-term
7. cannot downgrade mid-term
8. can cancel within 72 hours with prorated refund

Annual Commitment

1. annual commitment
2. new 3-year commitment/term (no extra discounts announced yet)
3. price protection for period of term
4. 20% less than monthly, no commitment price
5. upgrades for some products permitted mid-term
6. downgrades not permitted until end of term
7. quantity increase is possible
8. no quantity decrease until end of term
9. can cancel within 72 hours with prorated refund

 

 

The AME Group is a Microsoft Gold Partner.

Are you looking to migrate to Microsoft 365? We can help make that transition smooth and successful. Contact Us Today.