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Microsoft increases subscription prices after a decade

Mixed user reviews about 20% price hike

It’s no secret that price increases are inevitable, especially in a period of inflation. For the first time since the launch of Microsoft’s Office 365 a decade ago, commercial users will experience changes to their monthly and yearly subscriptions beginning March 1.

With long-term users in mind, these changes will dramatically affect those wanting to stick with the month-to-month plans. A 20% surcharge will be included on top of the new price increase.

Office 365 price increase for the following commercial products:

  • Microsoft 365 Business Basic (from $5 to $6 per user)
  • 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).

Microsoft is allowing users a little bit of flexibility to get the best bang for their buck by allowing them to mix and match plans. There are a couple of ways this can be achieved.

Option 1

  • Completely avoid the 20% surcharge by switching to the 1-year term agreement.
  • 1-year Term plans and Month-to-Month plans can be utilized simultaneously. For those with seasonal workers can be on the Monthly plans, while keeping permanent staffer on 1-year terms.

Option 2

  • Stay on month-to-month plan
  • Pay the 20% monthly surcharge.
  • Mix and match plans available.
  • 1 year Term plans and Month-to-Month plans can be utilized.
  • Businesses with seasonal workers can be on the Monthly plans and permanent staff can be on 1-year terms.

Flexibility is something many users desire and Microsoft recognizes that by crafting a way for its users to have the best from both plans. Even though this is a small win for users that need the flexibility, there is still a catch. Unlike the old model where users had more control over their subscriptions, the new price models leaves zero wiggle room for users that need to cancel plans when they lose employees. Microsoft will still require subscription payments even if the subscriber wants out midway through a term.

For more information on how we plan to implement these new changes, please give us a call today.

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