Microsoft delays Office 365 and Microsoft 365 price hike
There will now be a transitional grace period for those businesses worst hit by the changes
Microsoft has announced that it will be delaying the planned price increase on Office 365 and Microsoft 365 products by a few weeks due to high demand for the services in the run up to the changes.
First announced in August 2021, the “substantive” price increases across a number of Modern Work products was due to come into effect on 1 March 2022.
Microsoft said the “transitional grace period” was implemented to “provide partners with additional lead time for adapting business processes”. It added that it does not believe partners will use the additional time to pull forward demand for the products.
All new commerce transactions will need to be submitted to Microsoft by no later than 14 March 2022 at 5 PM Pacific Daylight Time, or midnight at Coordinated Universal Time (UTC), in order to be eligible for the February 2022 pricing.
The price increases range between $1-$3 per user, depending on the product, but in large companies this can amount to a sizeable increase to IT departments’ overhead costs.
The six Modern Work products affected by the price changes include:
- Microsoft 365 Business Basic: $6 per user per month, up from $5
- Microsoft 365 Business Premium: $22 per user per month, up from $20
- Office 365 E1: $10 per user per month, up from $8
- Office 365 E3: $23 per user per month, up from $20
- Office 365 E5: $38 per user per month, up from $35
- Microsoft 365 E3: $36 per user per month, up from $32
In the initial announcement, Microsoft said it represented the first major pricing adjustment for Office 365 and Microsoft 365 since it was launched in 2011, a decade previously.
The Total Economic Impact™ of IBM Spectrum Virtualize
Cost savings and business benefits enabled by storage built with IBMSpectrum VirtualizeFree download
In December 2021, four months after the announced price increases, Microsoft also said it would be raising the prices of pay-monthly Microsoft 365 products by 20% unless partners chose to be billed on an annual basis.
Managed Service Providers (MSPs) complained at the time that they could stand to lose money if a customer went bankrupt or chose to decrease the number of licenses they needed if they opted for an annual subscription.
What 2023 will mean for the industry
What do most IT decision makers really think will be the important trends and challenges in the coming year?Free Download
2022 Magic quadrant for Security Information and Event Management (SIEM)
SIEM is evolving into a security platform with multiple features and deployment modelsFree Download
IDC MarketScape: Worldwide unified endpoint management services
2022 vendor assessmentFree Download
Magic quadrant for application performance monitoring and observability
Enabling continuous updating of diverse & dynamic application environmentsView Now