Microsoft 365 Pricing - Is it slated to go up?

[britechguy]

I do not often pay attention to Microsoft 365, but I seem to recall @Sky-Knight recently mentioning that there is a slated upcoming jump in annual subscription price of approximately 20% (and I know I could be wrong).

Is there an upcoming price increase? If so, when and will it cover all plans or just certain ones?

 

[Sky-Knight]

I do not often pay attention to Microsoft 365, but I seem to recall @Sky-Knight recently mentioning that there is a slated upcoming jump in annual subscription price of approximately 20% (and I know I could be wrong).

Is there an upcoming price increase? If so, when and will it cover all plans or just certain ones?

There are two things changing.

1.) Specific SKUs are going up in price effective March 1st.

Details here: https://www.microsoft.com/en-us/microsoft-365/blog/2021/08/19/new-pricing-for-microsoft-365/

TLDR

On March 1, 2022, we will update our list pricing 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), and Microsoft 365 E3 (from $32 to $36). These increases will apply globally with local market adjustments for certain regions. There are no changes to pricing for education and consumer products at this time.

Those specific products are going up in price, no others. You'll also note the Personal and Family plans remain untouched.

2.) Microsoft is now enforcing its annual commitment terms.

What does this mean? Well since time immemorial M365 subscriptions have have two prices, an annual commitment price, and a month to month price. No one ever bothered to use the month to month price because it was 20% higher, and Microsoft didn't enforce their annual terms. So you'd just say you were going annual, pay monthly and get rid of things when you didn't want them. All of this ends July 1st! Microsoft will then be enforcing commitment terms. This means resellers have to pay for their customers if the customer doesn't pay or go month to month.

This is what I meant when I said everything was going up 20%. However again, specifically the Personal and Family subscriptions are untouched by this because they are ANNUAL PLANS, paid in advance. So they never had a month-to-month billing option to be associated with the 20% price increase.

The people that were really hurt by this were month-to-month people using M365 Premium. Today it's $20 / user / month, March 1st it's $22 / user / month, July 1st it's $26.40 / user / month!

P.S. The contract is set in stone 72 hours after purchase, so if you want to change things in the new world you'd better be on the ball. If you change providers, you cannot upgrade that old sub anymore... all sorts of fun in this mess.

 

[Porthos]

Personal and Family subscriptions are untouched by this because they are ANNUAL PLANS, paid in advance. So they never had a month-to-month billing option

I do not know if you meant the consumer m365 direct from MS but they, at least currently have the higher-priced monthly plan.

 

[britechguy]

I do not know if you meant the consumer m365 direct from MS but they, at least currently have the higher-priced monthly plan.
View attachment 13515

And they've had that for quite a while.

 

[Sky-Knight]

I do not know if you meant the consumer m365 direct from MS but they, at least currently have the higher-priced monthly plan.
View attachment 13515

I didn't know that! Interesting.

If the 20% applies to those, that would make Personal $8.39 / month, and Family, $11.99 / month. I'm not sure if that's applying here though, Microsoft has always had those subs in their own place separate from the rest of M365. I guess we'll find out in July.

 

[SAFCasper]

Paying more for monthly commitment I'm ok with. Most software vendors do the same thing it's just presented differently as a "discount" for 1yr, 3yr, 5yr commitments etc.

Upgrading licencing mid-term is what I'm really concerned about because there are no upgrade options other than buying a new sub and cancelling the old.

Example:
Client is 6 months into a subscription of Exchange Online. Decide they want to use SharePoint so need M365 Business Basic. What happens here? I'm assuming they need to eat 6 months of paying full whack for both subscriptions until the Ex Online expires.

This is going to make it incredibly difficult to upsell clients on licencing. Realistically you only have the opportunity once every 12 months otherwise they get shafted.

 

[Sky-Knight]

@SAFCasper If you're referring to the new program? All subscriptions can be upgraded, and when they are upgraded the new subscription terminates when the old one did.

So if you had for example, a 1 year pre-paid Exchange Online Plan 1, and you're 6 six months into it, and you want to upgrade it to Business Basic, that happens on the month anniversary, and the client pays the difference in the remaining time. Which in this case really isn't that much money because the two subs are very close together price wise. You can upgrade the subs to bigger subs AND increase the seat counts within the sub's duration at will, and none of these actions extend the sub's contracted time. (Microsoft and PAX8 as well as others have training on this for a reason, I suggest enrolling in a class!)

But yes, the discount for paying a year in advance is expected, what wasn't expected was us all getting that discount in effect for free for all this time. The new pricing makes a ton of sense, but it is still a price hike especially for month-to-month Premium users.

There however is ONE RUB here... ONLY the original seller of the first sub can do the upgrade! So if you sold it, you're good... If the client bought it direct... you're good. But if the client got their sub from someone else and you took over, you have to get the old vendor to do the upgrade and pay them. The subs are a contract, and set in stone 72 hours after purchase.

P.S. We're also getting 3yr M365 subs, but they do not offer any further discount, so I don't see the point.

P.P.S. I think partners that sold a pre-paid annual sub can still revoke the sub from the client when they leave too... I'm still trying to get detail in this space, because if I'm right it opens the door to some seriously petty crap!