Everything You Need to Know About Price Increases for Microsoft 365

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Everything You Need to Know About Price Increases for Microsoft 365

If you use Microsoft 365 for your business or are planning to subscribe to it soon, you’ll want to know the details of an upcoming price increase that Microsoft says is the “first substantive pricing update since we launched Office 365 a decade ago.” 

Office 365 was launched in 2011 with just a handful of apps – namely Word, Excel, PowerPoint, and Outlook. Since that time, the platform has gone through a rebranding to Microsoft 365 and has added over 20 more applications.

Users of the platform have largely enjoyed the addition of valuable work tools like OneDrive, SharePoint, and Microsoft Teams without any major changes in pricing. But that’s about to change for many users.

Here are the details you need to know to plan your technology budget accordingly.

When Are Prices Going Up?

The price increase for Microsoft 365 will go into effect on March 1, 2022.

Which Plans Are Being Impacted?

Educational and home/family users of Microsoft 365 can rest easy right now, they are not being impacted by this price increase.

The price increase is mainly targeting business and enterprise plans. When reviewing the increase in prices, you may want to consider whether an upgrade to the next plan makes sense for you, as price differences may have changed.

Of note is that one of the popular Microsoft 365 business subscriptions is not included in this increase – that plan is Microsoft 365 Business Standard.

Who Is Impacted & By How Much?

As of March 1st, the new pricing will take effect. The increase will range from $1 per user/month to $4 per user/month, which is an increase for some companies of up to 25%.

Plans being impacted and the new pricing are as follows:

  • Microsoft 365 Business Basic: Increasing from $5 to $6 per user/month (+$1)
  • Microsoft 365 Business Premium: Increasing from $20 to $22 per user/month (+$2)
  • Office 365 E1: Increasing from $8 to $10 per user/month (+$2)
  • Office 365 E3: Increasing from $20 to $23 per user/month (+$3)
  • Office 365 E5: Increasing from $35 to $38 per user/month (+$3)
  • Microsoft 365 E3: Increasing from $32 to $36 per user/month (+$4)

Microsoft 365 has an annual commitment, so it’s important to budget accordingly. For example, if you are using Microsoft Business Premium, which includes additional security and an endpoint device manager, annual pricing could look like this for 10 users.

  • Annual cost before: $2,400 (10 users x $20/user/month)
  • Annual cost after: $2,640 (10 users x $22/user/month)
  • Increase of: $240

What’s the Reason For the Increase?

With inflation causing everything from gas to eggs to cost more right now, it’s not surprising to assume this is just another thing being increased. But in Microsoft’s case, this is more of a strategic move to fund continual security and feature upgrades.

Companies like Microsoft plan these types of increases well in advance, so this has been in the works for a while and was announced in a press release on August 19, 2022.

Here are some of the factors that went into the decision to increase Microsoft 365 Prices.

Team Communication & Collaboration Features

In today’s post-pandemic world, the ability to connect and collaborate online has become vital for business operations. Microsoft has been adding multiple team collaboration tools and enhancing its communication platform Microsoft Teams over the last several years.

Part of the price increase is due to the new connection capabilities it has planned on the horizon that will further enhance the online meeting and hybrid work experience. Two that will be coming soon are Microsoft Loop for team workspace collaboration and Mesh for Teams, which takes your online meetings into the 3D realm.

Security & Compliance Enhancements

In both May and June of 2021 phishing attacks increased over 280% each month. With ransomware and credential theft attacks growing and data privacy compliance rules getting stiffer, compliance and IT security are two major areas where Microsoft expects to be spending even more than it already has to fortify M365.

Some of the advanced security features already added to the platform over the years include:

  • Sensitivity labels
  • Safe links & safe attachments
  • eDiscovery
  • Data loss prevention
  • Core litigation hold
  • Microsoft Security Score
  • And more

AI and Automation

Another area where more resources will be deployed to enhance Microsoft 365 is automation and AI. The company has already taken advantage of these capabilities with things like text predictions in Word and Outlook, data types in Excel, and Presenter Coach in PowerPoint.

You can expect more features being powered with AI to enhance your workflow and help users do more in less time.

Review Your Microsoft 365 Plan to Ensure a Perfect Fit 

Have your needs changed since you first signed up for M365? C Solutions can help your Orlando area business review your current Microsoft 365 plan and see if you’re leaving any value on the table.

Schedule a free consultation today! Call 407-536-8381 or reach us online.