by Scott Clark 
Microsoft is increasing the prices for their Microsoft 365 subscriptions. With Microsoft reporting, it’s the first significant price increase in over ten years, and you can expect to pay around 20 to 40 per cent more. 
Microsoft will be carrying out changes with its Microsoft 365 subscriptions. 
You can commit to a 12-month agreement, which locks in the current prices for a year, but you will lose flexibility during your contracts. 
You can increase the number of licences in use, but you cannot decrease them. 

What are the changes to Microsoft 365 subscriptions, and what do they mean for users? 

Microsoft has released an article that explains the company’s new approach to Microsoft 365. The main change is introducing a user-based approach, rather than licences based on specific devices such as PCs and mobile phones. 
So, whether your team members are using iPhones or Android smartphones (or both), you won’t need to purchase additional subscription licences. 

What are the Microsoft price increases? 

Microsoft are increasing the price of the following 6 subscriptions as of 1st March 2022 
Monthly Commitment 
The Microsoft Business 365 plans increase in price: 
Microsoft 365 Business Basic - 18.42% Increase 
Microsoft 365 Business Premium - 10% Increase 
Microsoft 365 E3 - 13% Increase 
The Microsoft Office 365 plans increase in price: 
Microsoft Office 365 E1 - 25% Increase 
Microsoft Office 365 E3 - 15% Increase 
Microsoft Office 365 E5 - 8.44% Increase 
As of the 1st June 2022 Microsoft are increasing the price of ALL subscriptions on a monthly term by 20%. This is in addition to the increases on the products above. 
The changes are part of Microsoft's New Commerce Experience pricing program which is designed to reduce complexity in the billing process and provide cost savings for longer-term subscription commitments. 
What Does This Mean For You? 
New Commerce Experience will change how you purchase Microsoft services such as Microsoft 365. Through NCE you will start a new type of annual subscription, and these prices will differ from previous subscriptions. You can also have mid-term upgrades. Available upgrade paths are now defined by Microsoft. It also brings a pricing premium which impacts clients who don’t want to make a minimum commitment of 12 months. 
Monthly Or Annual Subscriptions 
Under the current purchasing program, clients are free to increase and decrease their licences on a monthly basis without penalty.Once in the New Commerce Experience (NCE), clients can choose to retain the monthly flexibility but there will be a 20% premium charged against those licences.If you choose to take an Annual Subscription commitment, there is no 20% premium charged and you can continue to pay on a monthly basis. 
Annual subscriptions offer the best way to avoid mid-term price increases from Microsoft and provide a predictable cost for licensing across the year. 
Monthly vs Annual Subscriptions 
Term Commitment: 1 full month 
Priced at a 20% premium above the Annual Subscription option 
Offers the most flexibility 
No price lock 
Can be upgraded midterm 
Enforced cancellation policy. No cancellation or seat reduction outside of the initial 72 hours 
Subscription seat increases can be made at any time 
Term Commitment: 12 months 
Priced in line with the current legacy pricing 
Price locked for the entire term 
Annual subscriptions offer the best way to avoid mid-term price increases from Microsoft and provide a predictable cost for licensing across the year.  
Annual Subscriptions cannot be cancelled mid-term for any reason. The quantity of licences cannot be reduced and there are no refunds for unused licences.  
Annual Subscription user volumes may be increased at any time by the client but not decreased.  
Any changes made have a 72 hour cancellation window before being locked in for the rest of the term. 

Why are Microsoft increasing their 365 prices? 

Microsoft's justification for their decision to increase prices is that it has been 10 years since they launched Office 365. They say this new pricing reflects the increased value customers have received from them over these past decades, according to corporate vice president for Microsoft 365 Jared Spataro. 
Microsoft's latest additions to their already expansive suite of products are sure not going unnoticed. The company has added more than two dozen new apps since it first appeared. Including Teams which has become extremely popular among companies and experienced an upward trend following the Covid-19 pandemic. 
With the use of technology set to increase even more in coming years, this is a trend that will not likely go away any time soon. 

Microsoft 365 has grown to over 300 million commercialised paid seats. 

Along the way, Microsoft has reported that they have been continuously re-investing in order to meet changing customer needs. Four years ago they introduced Microsoft's newest product lineup bringing together the best from Office applications like Word or Excel alongside windows platforms such as OneNote among others while also providing enterprise mobility security (EMS) features making sure your data stays safe at all times! 
In fact, since introducing Microsoft 365, they have added 24 apps to the app stack— 
Power Automate 
Microsoft Teams 
Plus over 1,400 new features and capabilities in three key areas 

Microsoft Teams 

1. Collaboration and Communication. 

Microsoft Teams is a platform that offers users the flexibility to work from anywhere, anytime. With over 250 million monthly active users and new capabilities released every year including 
With together mode for real-time or background effects, you can produce stunning content without interrupting your workflow. 
A large gallery view that makes it quicker than ever. And live reactions where others see everything unfolding right before their eyes as if they were there themselves. 
The power of integration between all major products is finally available within one platform - whether it be Power Platforms Whiteboard Lists Planner Shifts Forms SharePoint etc... 
This means businesses could benefit greatly by adopting this technology which not only saves time but also provides better efficiency 

2. Compliance and Security 

Click onWith the volume, sophistication and scale of cyberattacks increasing every day, businesses need to be more aware than ever about cyberattacks, security and compliance. 
Microsoft 365 offers new capabilities that allow organisations not only to detect but also block or remediate threats within an organisation’s own network in order to keep information safe while staying compliant with industry standards this text to edit it. 

3. Automation and Artificial Intelligence 

Microsoft is using artificial intelligence to help people be more productive, efficient and creative. For example, AI-powered real-time translation takes communication to the next level by making it easier for everyone. 
Then there are Excel's cloud-enabled features allowing automatic creation of maps, tables and charts all with stunning visualisations powered by the smartest AI. You can also more easily sort your email, with AI automatically decluttering Outlook so you can focus on what's important. 

Extending your Microsoft 365 audio conferencing capabilities 

With unlimited dial-in capabilities for Microsoft Teams meetings across the enterprise, business and frontline solutions. Microsoft knows that people join these sessions while they are on the go or dealing with a bad internet connection. 
This is currently included in M365 E5 subscription plans and Office 365 E5. Unlimited dial-in provides peace of mind that users will be able to join their Microsoft Teams meeting from just about any device regardless if they're in the office or not. 

Frequently Asked Questions 

Why are there changes to cancellation, refunds, and pricing when Cloud Solution Provider (CSP) is fine as it is? 
Microsoft are introducing a set of new offers, policies, and functionalities that bring a consistent pricing and commitment approach across all of the different ways a client can purchase licensing today. 
Why do monthly subscriptions cost more than an annual or three-year term subscriptions? 
Monthly offers are priced consistently across all new commerce purchase motions and are aligned to the market.  
If I increase seat quantities during an annual subscription does it extend for a new 12 month period?  
No. Any increase in seats on an existing 12-month subscription will simply co-terminate with the original subscription end date. 
Why do I have to pay for a full term if I have financial difficulties and need to cancel before the end of the term? 
In the new commerce for CSP, the expectation will be that a client chooses the better pricing on annual term offers, knowing that they’re committing to the full term of payments, whether the subscription is paid upfront or in monthly instalments. 
Three days isn’t enough of a cancellation period 
The 72-hour cancellation window is in line with policies used in other Microsoft new commerce purchase motions and how our competition operates. Clients who aren’t sure about committing to an annual term should be encouraged to purchase the monthly term option so that they can cancel at the end of any given month with no further payment obligation. 
Will I still get billed for my subscription over the annual term even if I stop using the subscription? 
Clients who choose the annual term option are accepting that; 
(a) Cancellation of the subscription won’t be allowed after the first 72 hours of the term. 
(b) The client is committing to payment in full in any circumstance. 
This restriction is in line with the policies of competitors and in other industries in which more favourable pricing is provided in exchange for committing to the full term of payment, regardless of whether the client is using the product or service. 
If a client is uncertain about or unable to commit to using a subscription for the entire term or maintaining at least the number of seats originally purchased, they should strongly consider buying the monthly term option, so that they can cancel or reduce seat counts at the end of any month’s term. 

What does this mean for our customers? 

Unfortunately, as a Microsoft Partner, we'll have to pass on any cost price increases. We are trying as hard as possible to keep the cost increases to a minimum and are advising customers to purchase annual subscriptions to take advantage of the discounts Microsoft are offering. 
What do you think about the price increase? 
Do you think that Microsoft is justified in raising its prices? 
Are you looking for award-winning Fully Managed IT Support & Cyber Security protection from a Microsoft Partner In Hull & East Yorkshire? 
Ps. we are a Microsoft Gold Partner, contact us if you need help to understand Microsoft’s new subscription pricing. 
Download our free IT Support & Solutions Brochure by simply clicking on the link or the image below to grab your copy today! 
We offer a wide range of advanced security support packages and support services including: 
We also offer support on which versions of office you should be using, to Office Mobile App support. Contact us today on 01482 333 505 
We hope you have enjoyed this blog post on Microsofts substantive pricing update, please like or share if you found this useful. 
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