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Microsoft's Office 365 price increase in 2022: What you need to know

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"Microsoft to increase prices for Microsoft 365 in 2022". Maybe you've seen it in the headlines lately or perhaps this is the first time you're hearing about it. Either way, I doubt anyone clicked their heels as they jumped for joy upon hearing it. Price increases? Boo! Right? Well, not necessarily. While no one loves to pay more for anything, Microsoft has actually been adding value to what you currently get for free for a decade and thus, has finally decided to minimally up the price. Plus, the price change is avoidable. How? Learn more (and if you're even an affected party) in this short read:


Microsoft 365 Price Update

While no one loves to pay more for anything, Microsoft has actually been adding value to what you currently get for free for a decade and thus, has finally decided to minimally up the price of your goods. So, on August 19, 2021, Microsoft announced an update to its commercial pricing for Microsoft 365 that will go into effect on March 1, 2022. Here's an overview of what it said:


Update to our commercial pricing for Microsoft 365:

Summary

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. Learn more details about NCE at the end of this blog. The biggest takeaway? The price increase only affects specific SKUs and only goes into effect if you remain on a month-to-month payment option. Yearly payment will result in the same overall price.


Details: Microsoft 365 price change

When Microsoft announced an update to their commercial pricing for Microsoft 365, this was the first substantive update since Office 365 was released in June 2011. That's almost 10 solid years without a price change! The increase will go into effect on March 1, 2022, and will include:

  • Enterprise: Microsoft 365 E3 (will increase from $32 to $36 per user), Office 365 E5 (will increase from $35 to $38), Office365 E3 (will increase from $20 to $23), and Office 365 E1 (will increase from $8 to $10)
  • Small Medium Business (SMB): Microsoft 365 Business Basic (will increase from $5 to $6 per user), and Business Premium (will increase from $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.

As times have changed, so have the needs of customers and Microsoft has risen to the challenge. Think of the last year alone! So much has changed in the ways we communicate, work, and live, and this means that technology has had to accommodate and...Microsoft's tech certainly has! So, they are upping the price, quite modestly, to account for these innovations. And...in case you were wondering, they are pretty darn effective!

employee effect

 

admin effect

 

company effect

 

Since its initial release, Microsoft has 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 (read our 9 Tips for Meeting with Microsoft Teams blog). Additionally, Microsoft has added essential capabilities like data loss prevention (DLP) for documents and emails, Office messaging encryption, and attack surface reduction capabilities. Additionally, Microsoft has added new AI-supported capabilities to help automate tasks, find the information that we need, and help us communicate in ways that are more accessible for everyone.


Dial-in: Microsoft Teams Meetings Changes

Another addition? Microsoft has 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

Audioconferencing

Dial-in is currently included with Microsoft 365 E5 and Office 365 E5. However, as our need to communicate has increased, Microsoft has come to see dial-in as an essential part of the complete Teams experience. Thus, this change will also be effective come March 2022. To be clear, this is not the cause of pricing changes. 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 its customers (like you!). Pretty nice, eh? 


Office 365 Price Increase: Why?

"Microsoft believes that this is the right time to update our 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."

Our takeaway: There’s no doubt about it, Microsoft wants to make it more economically transparent that E5 represents the best value and honestly, we agree. The power of E5 vs. E3 is substantial and well worth the menial investment. 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 meaning having all your eggs in the Microsoft basket.

 

While this may not be a good strategy for investing, it certainly is for your business subscriptions. One vendor for all of your bills? Yes, please. Plus, when you purchase from a partner, it's easier to get the best support possible (read more about what a partner does and why you want to make sure you're happy with yours in our blog: What is a Microsoft Certified Partner?). Not feeling so supported? Reach out via the chat or schedule a meeting with Josh to learn how we can help you (and why we have a 4.8 Trustpilot score from our customers):

Schedule a meeting


Microsoft 365 price change: Frequently Asked Questions

Why is Microsoft increasing the price of Microsoft 365? 

Again, 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.

"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.
  • Added capabilities like data loss prevention (DLP) for documents and emails, Office messaging encryption, and attack surface reduction capabilities. 
  • 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. It does not apply to consumer and education customers.

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.

Microsoft Office 365 Price Increase: See it Visually

Maybe, like many of us, you're a visual learner. If so, here are some visuals to help show the changes taking place and the additions Microsoft has made to its product over the last ten years:

Improvements to Office Microsoft 365

 

Pricing changes 2022


What does this mean for BEMO customers?

On March 1, 2022, the default setting (as it is now) will be for every customer to remain on month-to-month billing. This will mean incurring a small price increase, depending upon your license. If you'd like to move to an annual plan to save money, you will simply go into the BEMO store to do so (or contact us and we will walk you through how to do this in the store). 

What about proration? If you buy a new subscription, say, 20 licenses of Business Premium on January 1, 2022, and then on March 1 by an additional 1 license, it will be prorated to the January 1, 2023 renewal date and you'll pay for 10 months worth of the incremental license.

Questions?

We're here for you. Again, we know that no one loves to hear of a price increase but thankfully this one is small and with the added dial-in, everyone gets a little extra for free. If you have questions, or would like more information on your plan, or are simply feeling unsatisfied with your Partner and would like to shop around, please feel free to reach out via the chat, or schedule a meeting with Josh:

Schedule a meeting

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