Prices are set to increase for most Microsoft 365 Business and Office Products in March 2022 as part of the Microsoft New Commerce Experience, and all current subscribers should anticipate absorbing these new costs. Expect individual license fees to increase anywhere from 10 to 20 percent on Business plans and 8 to 25 percent on Enterprise plans.
The new Office 365 pricing plans apply globally to all Microsoft 365 subscribers. They only impact specified Business and Office editions, however. The proposed price increases, calculated per user with annual commitments, are as follows:
- Microsoft 365 Basic increases from $5 to $6
- Microsoft 365 Premium increases from $20 to $22
- Office 365 E1 increases from $8 to $10
- Office 365 E3 increases from $20 to $23
- Office 365 E5 increases from $35 to $38
- Microsoft 365 E3 increases from $32 to $36
Microsoft described these changes as their New Commerce Experience, where billing is unified for all users, making it easier for resellers to manage subscriptions. Many commercial subscribers will encounter an additional 20% premium if they have selected month-to-month Office 365 business pricing plans instead of committing to an annual or multi-year agreement. If you are operating a business that depends on season upticks or is known for a high employee turnover rate, the sum of these additional costs can be considerable. Microsoft’s new multi-year pricing plans for Office 365 no longer offer the option to reduce the license count for individual users when staffing counts drop. Moreover, companies cannot downgrade their license by moving into a less robust plan after signing the initial agreement.
Microsoft explained in an official blog last year that these changes will only affect Office 365 business pricing and not educational or consumer subscriptions. The reasoning behind this increase is that the service, having grown to over 300 million commercial users, has seen no substantive price increase since Office 365 launched more than a decade ago.
Spokespeople from Microsoft, however, believe that the rise in cost will equate to an increase in value for its customers. Since its inception, the company has added 24 new applications to the Office 365 software. Microsoft Teams, Power Apps, Power BI, Power Automate, Planner, Whiteboard, and Yammer are chief among them. In addition to this, Microsoft introduced 1,400 new features over the past ten years that have helped support the three major areas of business: communications and collaboration, security and compliance, and AI and automation.
The year 2017 marked the beginning of Microsoft Teams, a program that revolutionized how offices communicate and collaborate. An all-in-one application for chatting, calling, and task management, Teams proved to be especially useful during the pandemic when more associates were working remotely from home. Over the past four years, Teams found more than 300 enhancements with the addition of new features to include Together mode, Background Effects, Raise Hand, Live Reactions, and Breakout Rooms.
Microsoft has, likewise, made several noteworthy strides in improving several security features to Office 365. The company enhanced Data Loss Prevention (DLP) features for email and document files while introducing sensitivity labels and encrypted messaging. Developers at Microsoft have also been keen to adopt artificial intelligence and automation technologies by implementing AI-powered translation, caption, and transcription functions that produce results in real-time.
Microsoft 365 continues to evolve
As previously mentioned, Microsoft has introduced countless changes over the past ten years. Business owners should only expect this to continue indefinitely. Continual innovation is important because, as security and compliance regulations become increasingly stringent, business owners can find peace of mind knowing the software’s higher premium is well-invested.
The primary challenge posed to business leaders is how many licenses to acquire. Some company decision makers may determine that it makes better economic sense to keep their agreements with Microsoft flexible so they can reduce the number of individual user licenses they hold throughout a given year.
Organizations may contract one to three-year license agreements before March of 2022 at the current rates. If time allows, locking into a new contract before being forced to make another business evaluation addressing the changes to Office 365 pricing plans might be a wise strategy.
Facilitating new license and subscription agreements is resource-intensive. These additional costs, on top of the pending rise in subscription prices due to take effect on the first of March 2022, can start to add up. Acting before the new price increases etch themselves in stone will undoubtedly save you money while allowing for more contractual flexibility.
A managed IT service like PCH Technologies can ease most of the common administrative headaches associated with coordinating new licensing agreements while tracking your existing ones. PCH Technologies provides all the necessary IT controls for complete and optimal visibility into your company’s software license environment and more.
Since security is the utmost consideration in keeping your business compliant, Microsoft approaches all their Office 365 enhancements with this factor in mind. Users access all Office applications through 128-bit SSL/TSL encryption for ultra-secure communication transmissions. Should an authorized interception of the exchange occur, the software prevents the threat actor from reading it. Microsoft, likewise, keeps its antivirus signatures current and in compliance with its trustworthy computing initiative. Electronic messages always remain protected from Malware via anti-spam filters and antivirus programs with several virus engines which is crucial to protecting your business.
Tips to minimize Microsoft 365 costs
Here are some tips to minimize the cost impact of Microsoft 365 New Commerce Experience and some best practices:
- Perform an audit of all your current Microsoft 365 licensing to ensure the user list is correct and that each user has the proper subscription that they require.
- Consider locking in an annual commitment based on the turnover of users in your organization to minimize the 20% cost surcharge for monthly billing. In most situations, consider the 80/20 rule by having 80% as annual commitments and 20% as monthly to balance cost savings with flexibility.
- It is also important to have robust user onboarding and deboarding procedures that consider the users’ Microsoft 365 license needs upon joining as well as making sure users are deactivated when they are no longer with the organization.
These are overall tips and best practices to minimize your Office 365 costs. There may be additional ways based on your unique circumstances.
Partner with PCH Technologies
Do you have concerns about how to handle your Office 365 licensing this year? PCH Technologies can help you during this transition. As Gold Microsoft Partner with a team of certified IT professionals, PCH Technologies can help support your company by offering cyber risk assessments, email security protection, ransomware, business continuity, backup disaster recovery. To learn more, schedule a brief discovery call by dialing 844-754-7500 today.