Microsoft increases prices for Microsoft 365
Update to our commercial pricing for Microsoft 365
On August 19, 2021, Microsoft announced an update to its commercial pricing for Microsoft 365 that will go into effect on March 1, 2022.
This announcement impacts commercial customers was also followed by additional breaking news from Microsoft regarding the New Commerce Experience (NCE) which brings new terms with the intent to deliver more value to its customers. BEMO will communicate more details about NCE in the coming weeks.
On Thursday, August 19, 2021, Microsoft announced an update to our commercial pricing for Microsoft 365, the first substantive update since Office 365 was released in June 2011. This change will go into effect on March 1, 2022, providing customers with about six months of advance notification. It will include:
- Enterprise: Microsoft 365 E3 ($32 to $36 per user), Office 365 E5 ($35 to $38), Office365 E3 ($20 to $23), and Office 365 E1 ($8 to $10)
- Small Medium Business (SMB):Microsoft 365 Business Basic ($5 to $6 per user), and Business Premium ($20 to $22)
Changes to pricing for US government cloud customers will be phased in over several years in line with existing requirements. There’s no price change at this time for education or consumer products.
This price update builds on the product innovation that Microsoft delivered over the past 10 years to meet the changing needs of customers. Since initial release, Microsoft added 25 new apps and over 1,400 features. This includes the introduction of Microsoft Teams as the only solution with meetings, chats, calls, collaboration, and the ability to automate business processes. They have added capabilities like data loss prevention (DLP) for documents and emails, Office messaging encryption, and attack surface reduction capabilities. And Microsoft have added new AI-supported capabilities that help automate tasks, find the information that we need, and help us communicate in ways that are more accessible for everyone.
Microsoft also announced the extension of unlimited dial-in across its paid enterprise, business, frontline, and government suites, enabling users to dial in and join a Teams meeting from virtually any device. The change will affect:
- Enterprise: Microsoft 365 E3, Office 365 E3, and Office 365 E1
- Government (GCC, GCCH, and DOD):Microsoft 365 E3, Office 365 E3, Office 365 E1, Microsoft 365 F3, and Microsoft 365 F1
- Frontline: Microsoft 365 F3, Microsoft 365 F1, and Office 365 F3
- SMB: Microsoft 365 Business Premium, Microsoft 365 Business Standard, and Microsoft 365 Business Basic
Currently included with Microsoft 365 E5 and Office 365 E5, Microsoft has come to see dial-in as an important part of the complete Teams experience. This change will be effective in March 2022.
To be clear, Microsoft is not increasing their prices because of this change. Extending dial-in capabilities across the SKUs is simply the latest example of how Microsoft regularly delivers new value to support the changing needs of our customers.
Microsoft believes that this is the right time to update their pricing, based on the signs of economic recovery that we’re seeing around the world and the price increases that we’ve seen from other vendors in the market in the past few years. Microsoft has a strong value proposition and a proven track record of consistently delivering new value to our customers.
No doubt about it, Microsoft want to make it more economically transparent that E5 represents the best value. The new pricing will reduce the step up from Microsoft 365 E3 to E5. In parallel, the changes to Audio Conferencing capabilities are intended to further support the case for vendor consolidation.
Frequently Asked Questions
Why is Microsoft increasing the price of Microsoft 365? What should we highlight?
This is the first substantive price update since Office 365 was released in June 2011. This change will go into effect on March 1, 2022 – providing customers with about six months of advance notification.
This change builds on the product innovation we’ve delivered over the past ten years to meet the changing needs of customers. Since release, we’ve added 25 new apps and over 1400 features including:
- The introduction of Microsoft Teams as the only solution with meetings, chats, calls, collaboration, and the ability to automate business processes.
- Microsoft have added capabilities like data loss prevention (DLP) for documents and emails, Office messaging encryption, and attack surface reduction capabilities.
- And Microsoft have added new AI-supported capabilities that help automate tasks, find the information we need, and help us communicate in ways that are more accessible for everyone.
Which licensing programs does the new pricing apply to?
The new pricing applies to commercial Volume Licensing, CSP, and Web Direct.
How will this price change impact existing customers?
Existing customers are not impacted until their next renewal on or after March 1, 2022.
What Audio Conferencing capabilities will be included in the new $0 add-on SKU?
The new Audio Conferencing SKU will include unlimited dial-in in geographies where the Audio Conferencing subscription is available today. In the US and Canada, the SKU will also include 60 minutes of dial-out per license.
What channels will the new $0 Audio Conferencing add-on SKU be available in?
This offering is available in all channels: Volume Licensing, CSP and Web Direct.
Recent updates build on a decade of constant innovation