Big changes are on the horizon. Since news of the Microsoft 365 price increase last year, we’ve had plenty of time to reflect on the information. Here are a few reasons why the price increase makes sense.

There’s been plenty of new Microsoft 365 features

It’s been five years since the last Microsoft price increase, and since then, they’ve introduced a variety of new apps and features to improve their products. From the launch of Teams, and Together Mode, to more incremental updates that kept things running — Microsoft has added plenty of value to its licence subscriptions over the past few years.

You save money elsewhere

Even with the upcoming price increase (which will come into place 15 March 2022 on commercial licences), Microsoft 365 offers businesses a lot of value. Throughout the pandemic, Microsoft has worked to help businesses adjust to different working conditions with the push for a Modern Workplace.

Thanks to the addition of Planner, many customers have saved money that they were previously investing in tools like Project – providing a net-cost saving already.

What about the New Commerce Experience?

Alongside the 365 price increase, Microsoft revealed a new programme to replace the current CSP model. The NCE will help streamline the product subscription processes. The changes include: 

The monthly term offers a price premium for customers who need term and seat-count flexibility. 

Annual terms offers with better value are available for stable, long-term customers. 

The announcement has several positives, including the launch of communication credits and new multi-geo capabilities for your Microsoft 365 tenant. But several points of the announcement have set alarm bells ringing for business owners.

Monthly cost

The recent Microsoft 365 price increase applies to customers taking out an annual agreement. So it would be reasonable to assume the monthly offer will be even higher- in other words, a double increase. 

Unlike the annual and multi-year options, there’s no price protection for the monthly customers. Further increases could therefore become a regular occurrence.

Flexibility

One of the key drivers behind cloud computing has always been flexibility. So, some of these changes to the CSP model feel like a step back rather than forwards. 

Microsoft now only allows a 72 hour “cool off” period where users can cancel or change their licences subscription from the start of purchase. If you no longer require certain licences after this period, you’ll have to continue paying for them all until the end of the term. You can add more, but you can’t reduce your seat count. 

Similarly, you can upgrade to a new subscription type, but you can’t downgrade mid-agreement.

To conclude…it’s a difficult one

It does feel like the benefits are stacked in Microsoft’s favour, and the goal of creating a “simplified purchasing experience” is conversely creating a lot of confusion. We’ll make sure to keep you updated the moment we get clarity on the new T&Cs.

Are you worried about the impact of the Microsoft 365 Price increase?

Whilst the price changes are unavoidable, you can still work with a Microsoft Gold Partner who provides value and extra discounts at every opportunity. 

As a Microsoft Gold Partner, we make sure every discount is passed directly down to the customer. Claim 2% off your subscription monthly for as long as we’re allocated the cloud solution provider of your choice.

Update (28 February): Microsoft has granted customers an additional 2 week transitional period to ease into the new pricing model. Therefore, all CSP new commerce transactions for the six commercial Modern Work SKUs listed above that are submitted into the system no later than March 14, 2022, 5 p.m., Pacific Daylight Time (PDT), or 12 a.m. UTC on March 15, 2022, will be invoiced at the February 2022 pricing. Find more details here.