Microsoft 365 subscription prices to rise next year
Price increases of up to 20 per cent will take effect from March 2022
Microsoft will raise prices for a bundle of popular products known as Microsoft 365. The increases, of up to 20 per cent, will affect commercial customers and will take effect within six months.
The Microsoft 365 SaaS software suite combines what was formerly known as Office 365 and Windows 10 with EMS (Enterprise Mobility + Security), Teams and other applications.
The basic business plan will see a rise of 20 per cent, from $5 per user to $6, while the high-end Microsoft 365 E3 will go up 12.5 per cent, from $32 to $36 per user.
The following plans will also rise in price:
- Microsoft 365 Business Premium (from $20 to $22)
- Office 365 E1 (from $8 to $10)
- Office 365 E3 (from $20 to $23)
- Office 365 E5 (from $35 to $38)
- Microsoft 365 E3 (from $32 to $36)
According to CNBC, the company will not change pricing for certain Office subscriptions, including Microsoft 365 F1 ($2.25), Microsoft 365 F3 ($8) and Microsoft 365 E5 ($57 per user per month).
The price changes will apply globally, with local market adjustments for certain regions. They will take effect 1st March 2022, and will not include consumer or educational products.
Microsoft justified the decision by highlighting that it was first 'substantive' cost change from the company since launching Office 365 a decade ago.
"This updated pricing reflects the increased value we have delivered to our customers over the past 10 years," Jared Spataro, Corporate Vice President for Microsoft 365, said in a blog post.
Spataro argued that the company had added more than two dozen new apps to the suite of products since it was first introduced, including Teams, Whiteboard and Power Platform - an application development tool for non-developers.
Spataro also highlighted three key areas where Microsoft products have advanced: communication and collaboration, AI and automation, and security and compliance.
Microsoft has announced that it will add unlimited dial-in capabilities for Microsoft Teams meetings across its enterprise, business, frontline, and government suites over the next few months.
The new capabilities will enable users to join meetings from virtually any device regardless of location, it noted.
While Microsoft still sells licensed versions of Office for use on premises, it has been getting the majority of commercial Office revenue from subscriptions since 2017.
In its most recent fiscal year, Microsoft's productivity and business process segment - which includes Microsoft 365 - had sales of $53.9 billion, about a third of the company's overall $168 billion in sales.