In March 2022 Microsoft is making 2 changes to their Microsoft 365 licensing for business customers.
Firstly, the price of certain Microsoft 365 licenses is increasing for the first time in 10 years, and secondly, the purchase options are also changing to move users towards the annual subscription options.
In this article, we take a look at these changes and what they mean for Irish business owners.
The first substantive price change in 10 years
Microsoft’s price changes came into effect on March 1, 2022 and affect those on the monthly subscriptions of the following commercial products:
- Microsoft 365 Business Basic will now cost €7.14/user
- Microsoft 365 Business Premium will now cost €22.56 /user
- Office 365 E1 will now cost €10.08/user
- Office 365 E3 will now cost €27.12/user
- Office 365 E5 will now cost €44.88 /user
- Microsoft 365 E3 will now cost €42.48/user
These increases apply globally to commercial customers and there are no changes to pricing for education or consumer products.
From June 1st, all of our Microsoft 365 clients will be defaulting to monthly subscriptions in order to retain the flexibility of their licenses. This means that all Microsoft 365 clients will incur a 10-20% increase in their license fees along with the new pricing of the 6 licenses above.
Changes to Microsoft 365 licensing agreements
Microsoft have announced that under their new commerce experience (NCE), Microsoft 365 licensing agreements will now be either monthly or annual subscriptions.
Annual Subscriptions
Annual subscriptions are paid up front and now include a commitment by the customer to a minimum number of licenses for the duration of the contract, which is 1 year. When you pay up front, your license fee pricing is then locked in for the year. Another Annual Option is Annual commit Monthly bill.
Both the above require the minimum number of licenses is the number of licenses purchased on the date the agreement begins which, in effect, means that commercial customers are unable to reduce their number of licenses. You can still add additional licenses of the same type to the agreement and these will then be included until the renewal date.
Adding any new license types, i.e. for products that are not in the initial agreement, then form a new agreement for 1 year from the date they are added.
Monthly Subscriptions
Companies can continue on monthly subscriptions for Microsoft 365 and pay on a monthly basis. However, the pricing for these licenses has been increased by the rates listed above, so companies will pay a higher price for the added flexibility.
The monthly subscriptions also include a commitment to a minimum number of licenses to be paid for per month.
Why is this happening?
Microsoft has provided a decade of innovation when it comes to its Microsoft 365 offering and as the world has moved to a more flexible, hybrid working world, its products are now more essential than ever.
Microsoft are leveraging this strong positioning as well as the fact that they haven’t increased their pricing over the past decade to solidify their commercial customer base and allow them to develop Microsoft 365 to ensure it keeps up with changing business needs over the next decade.
Get in touch
If you have any questions about these changes will affect your business, or if you would like to migrate to Microsoft 365, please contact out team at info@calnet.ie.
