Microsoft 365 Price Increases Coming

Microsoft 365 Price Increases Coming: What You Need to Know

On August 19, 2021, Microsoft announced new commercial prices for Microsoft 365, the first price update since the platform was launched ten years ago. In a statement released to the public, Microsoft says the updated pricing aligns with the added value the company has been offering the users in the past decade. 

OneSource Technology takes a deep dive on the price changes what it means to your business.

What Is the New Microsoft 365 Pricing?

The following is a breakdown of the new pricing for Microsoft 365 commercial products:

• Microsoft 365 Business Basic: The pricing for Microsoft 365 Business Basic changes from $5 to $6 per user
• Microsoft 365 Business Premium: Microsoft 365 Business Premium pricing changes from $20 to $23
• Office 365 E5: Office 365 E5 pricing increases from $35 to $38.
• Microsoft 365 E3: Microsoft 365 E3 prices changes from $32 to $36

When Will the New Prices Go Into Effect?

The new Microsoft 365 pricing model will go into effect in the next six months. This means that on March 1, 2022, you will be paying new prices for all Microsoft 365 commercial products. The increases apply globally with some local market adjustments for some regions. Notably, as of now, Microsoft doesn’t intend to introduce any changes to pricing for their education and consumer products.

What Are the New Improvements That Necessitated the Price Changes?

Microsoft first launched Office 365 in 2011 in 40 different markets. Today Office 365 has over 300 million commercial paid seats, and along the way, the company has been making improvements designed to make the tool more functional to meet the market’s changing needs.

Four years ago, the company rolled out Microsoft 365 that combines Enterprise Mobility and Security (EMS), Windows, and Office.

Let’s recap some of the innovations and additional features that the company delivered in the past ten years:

• Communication and collaboration: A key communication and collaboration feature that the company added is Microsoft Teams. Microsoft Teams is an integrated platform that enhances meetings and collaboration right in the flow of work. It now boasts more than 250 million monthly active users who leverage it to meet, chat, call, collaborate, and automate business processes. In 2020 the company released more than 300 new Teams capabilities, including live reactions, live captions, extensive gallery views, and more. It also added a new category of collaborative applications in Teams designed to empower organizations and workforces for hybrid work via integrations with Workday, SharePoint, Power Platform, List, Whiteboard, planner, and more.
• Security and compliance: As the world of cyber security keeps evolving with accelerated sophistication and scale of attacks, Microsoft is taking the necessary steps to safeguard organizations and persons using their products. Since introducing Microsoft 365 a decade ago, the company has added new surface reduction capabilities to help users wade off ransomware attacks and other forms of threats. Some of the newly added capabilities include data loss prevention (DLP) for email and documents, and message encryption, and sensitivity labels that help safeguard crucial data from leaks. The company has also added robust compliance capabilities to help organizations minimize risk and meet the increasing regulatory requirements such as core Litigation Hold, eDiscovery, and Content Search. Some of the new tools that help admins support remote and hybrid workforces in a secure environment include Microsoft Endpoint Manager and built-in mobile device management (MDM).
• AI and automation: Over the last decade, Microsoft has integrated AI capabilities across collaboration and productivity applications to enhance an organization’s productivity. The AI-powered innovations are specifically designed to help users maximize their writing, designing, and presentation skills. Cloud-powered AI can be used to generate maps, charts, and tables in excel. It can also be used to sort email and eliminate the clutter in outlook. You can also optimize your workflow using AI-powered real-time translation, captions, and transcription designed to make collaboration and communication more engaging and accessible for the entire team.
•  Extended audio conferencing: Microsoft recently announced a plan to add unlimited dial-in capabilities for Microsoft Teams meetings across their enterprise, business, government suites, and more. The new features will be available in over 70 countries with interactive support in 44 languages. This new edition will be carried over the next few months.

What Does the Price Increase Mean to Businesses?

The new pricing may not affect the larger businesses and corporations as much as the smaller enterprises. This is because larger businesses are more positioned to negotiate bulk discounts and deals. The new pricing may put undue financial pressure on smaller firms struggling to recover from the COVID19. However, considering the added features, including more than 20 apps to Office 365, the actual dollar impact per client will be pretty minimal.

What Does the Microsoft Price Increase Mean to Investors?

At OneSource Technology, we believe the price increase will be a significant financial boost for Microsoft over time. Once the price increase is complete, the over 300 million subscribers will pay between $1 & $3 more per month, translating to about $7.2 billion in additional revenue per year. However, investors will experience the full impact of the changes in fiscal 2023 and beyond.

So should you invest in Microsoft today? Well, it is worth noting that two days after Microsoft announced the first price increases for its Microsoft 365 and Office 365 commercial cloud product suites, their stocks surged 4.7% on the news. Microsoft undoubtedly ranks among the top stocks that hold higher promise, and investing in the company now gives you opportunities to increases your chances of making profits in growth stocks.

Final Thoughts

Microsoft reckons that “the price increase reflects the increased value we have delivered to our customers over the past 10 years.” Although the price changes won’t be drastic, it could still surprise users who have paid the same prices for the service since 2011.

However, considering Microsoft’s vast investments in its product offering in the past few years, one can conclude that the price increase is long overdue. If you have further questions or need help with your Microsoft 365, contact OneSource Technology today. We provide IT services and IT support to customers in Wichita and Kansas City metro areas. Contact us today to learn more.