Microsoft Price Increases March 2022

Gas price increases are not the only thing people are talking about. A hot topic lately is the news that Microsoft’s price increases are happening. Microsoft will raise the price for Microsoft 365(previously known as Office 365) shortly also. The announcement was made in August of 2021 through Microsoft. To get to the information about the substantial price increase, you had to read through multiple paragraphs detailing the enhancements Microsoft has made since the productivity suite was launched in 2011. However, you still have time to prepare.

According to Microsoft, the price changes are related to the rise in remote working over the last two years, which Microsoft has supported with a range of new features that have assisted remote workers in the transition from office work to remote work – such as the addition of Microsoft Teams to the productivity suite, one of the many applications that Microsoft has added since it was launched in 2011.

Microsoft Price Increases

You Only Have a Few Weeks to Prepare Your Strategy

The price change goes into effect on March 1, 2022. Many have had trouble understanding the new price list, as there are several Microsoft 365 packages. Are you using Microsoft 365 with just the basic features? Are you using a version of Microsoft 365 that provides Windows licenses? Microsoft 365 offers support for enterprise and frontline workers, under multiple categories. Who in your business is responsible for Microsoft software asset management? You can easily overpay if you don’t stay on top of the changes Microsoft is making. Microsoft is asking you to spend more money to save more. The percentage price increases will not be as costly on the more expensive bundles, closing the price gap and making the higher support levels more enticing.

Which Plans Are Being Impacted?

Educational and home/family users of Microsoft 365 can take a huge sigh of relief as they are not being impacted by this upcoming price increase. The price increase is targeting business and enterprise plans. When reviewing the price increases, you may want to take some much-needed time to determine whether your business needs to upgrade to the next plan, as price differences have likely changed.

On 1st March 2022, the following licenses will be subject to a 10-20% price increase:

  • Microsoft 365 Business Basic will be $6 per user (up from $5)
  • Microsoft 365 Business Premium will be $22 per user (up from $20)
  • Microsoft 365 E3 will be $36 per user (up from $32)
  • Office 365 E1 will be $10 per user (up from $8)
  • Office 365 E3 will be $23 per user (up from $20)
  • Office 365 E5 will be $38 per user (up from $35)

Microsoft 365 Business Standard and Microsoft 365 E5 will not be subject to the upcoming price change. In addition to the general price increases, Microsoft will be making changes to the subscription model, and are removing the ability for customers to make certain changes (such as downgrading) to licenses for the remainder of their contract. Businesses can be granted monthly, yearly, or multi-year contracts, with discounts offered for longer commitments.

Here are some strategies for a price increase of up to 25% coming for Microsoft 365 in March.

Know What You Need Before Making a Move

Every business is not going to need the most expensive license with comprehensive functionalities. With the upcoming changes to how and where work will be done moving forward, we encourage you to clarify how your end-users contribute to the business and how the Microsoft subscriptions will assist them in their day-to-day work responsibilities.

  • Create the profiles of the different end-users in your business. This should be the first thing you do when you are ready to get a handle on the price increases.
  • Do you Microsoft through a reseller? If so, you can take time to see what their competitors are offering to be sure you are getting the best price after the price hike.
  • Don’t let all the improvements Microsoft has named distract you. Before making a final decision, you should know exactly what applications and features your business needs and will use daily.
  • If you want to reduce the impact that vendors will have on the price increase, you may want to find out if price protection can be added in your contract.

Utilize a Microsoft Software Asset Management System

According to a report from Gartner, businesses can help minimize the impact of the upcoming price increase that can lead to:

  • Over and undersized licenses (you may discover that you don’t need every E3 license, or maybe you need more licenses than you have)
  • Licensed accounts that are either disabled or haven’t used their licenses for 1, 2, or 3 months
  • Licenses that are not being used (you would be surprised at how many businesses don’t know how many unused licenses they have)
  • Users with duplicate licenses

How Can I Lower My Microsoft Costs?

If you are hoping to reduce the impact that the price increase will have on your IT budget, here are a few options:

Purchase Standalone Versions 

While standalone versions are an option, they are not sufficient for businesses that hope to remain competitive in their industry by being innovative and embracing digital transformation.

Use the Online Version of Microsoft 365

You can certainly cut costs if you choose to utilize the online version of Microsoft 365, but this will not work for your business if you are looking for scalability.

Determine if You Can Lock In an Upfront Payment

If possible for your business to lock in a 12-month contract before March 1st with an upfront payment, effectively deferring the cost increase until your contract renewal date.

Take Your Business Elsewhere

You can always use other cloud-based tools, but there are not many tools like Microsoft 365 that will offer you the functionalities you need when it comes to remote work and collaboration.

The best thing you can do is:

Partner with a Top Microsoft Partner like tech42 LLC

Your business could already be paying too much on licenses that go beyond what you need. If you would like to check, you can arrange a consultation with one of our experts. We stay on the leading edge of IT breakthroughs and best practices. If you are running Microsoft 365 and you have questions about the new prices, reach out to us. We can answer your questions and offer solutions.

Thanks to our colleagues at Velocity IT in Dallas for their help with this content. Click here to learn more about them.