What You Need to Know About Microsoft 365 Price Increases

written by Michael Anderson posted on September 3, 2021

Microsoft’s Office 365 is undoubtedly the crown jewel of the modern workplace. The productivity suite that was launched ten years ago now boasts over 300 million commercial paid seats. Microsoft is announcing the first price increase in its commercial Office 365 and Microsoft 365 subscriptions.

Notably, these price changes, which will come into effect on March 1, 2022, will not affect consumer and education plans as well as the highest-end Microsoft 365 E5 SKU.  While announcing the changes, Microsoft 365 corporate VP, Jared Spataro, reckoned that “this is first substantive pricing update since we launched Office 365 a decade ago.”

Microsoft 365 Price Increases

Let’s take a deeper dive into the price updates and whether Microsoft is justified to increase the prices.

Microsoft 365 Price Increases

The New Price Changes Per Plan

Microsoft will update the price list for the following commercial products:

  • Microsoft 365 Business Basic increases from $1 to $6 per month per user.
  • Office 365 E1 increases from $2 to $10 per month per user.
  • Microsoft 365 Business Premium increases from $2 to $22 per month per user
  • Office 365 E3 increases from $3 to $23 per month per user.
  • Office 365 E5 increases from $3 to $38 per month per user.
  • Microsoft 365 E3 increases from $4 to $36 per month per user.

Notably, these price changes range from as low as $1 to as high as $4 per user per month or from $12 to $48 per user per year. As mentioned earlier, Microsoft 365 E5, currently going for $57 per user per month, won’t be affected by these price changes yet. Additionally, Microsoft will not also change the pricing for its Microsoft 365 for Frontline Workers primarily because the product is still new in the market.

What Is the Justification for the New Prices?

Microsoft says it is adjusting the prices to reflect the massive value and enhancements it has added to the Office 365/Microsoft 365 suites over the past several years. Since introducing Microsoft 365 four years ago, the company has added a total of 24 apps to its Office 365/Microsoft 365 suites, including Power Apps, Teams, Power BI, Stream, Planner, Visio, Power Automate, Yammer, OneDrive, and Whiteboard.

Notably, while some of these apps are available free of charge, such as the Power Platform family of products, others require additional licenses and subscription fees. Additionally, Microsoft has also added over 1400 new features to its Office 365 subscriptions targeting three key areas:

Communication and collaboration

Microsoft Teams is providing over 250 million monthly active users across the world a new front end across work, life and learning. Microsoft launched Teams in 2017 as an integrated solution that allows users to meet, chat, call, collaborate, and automate business processes within the flow of work. The following are some of the enhancements that Microsoft has added to Teams in recent times:

  • In 2020 Microsoft released more than 300 new Teams capabilities. These features include Together Mode, Live Reactions, Breakout Rooms, Large Gallery View, Raise Hand, Background Effects, Fluid Components, Live Captions with speaker attribution and more.
  • Microsoft also introduced top-notch collaborative tools in Teams designed for the productivity of organizations and workforces in hybrid work environments. The collaborative applications leverage deep integrations with Power Platform, Whiteboard, Lists, Planner, Shifts, Forms, and SharePoint to empower people and teams for hybrid work.
  • The company has also introduced real-time collaboration in PowerPoint, desktop apps, Excel, and Word. Microsoft is leveraging capabilities such as Auto-Save, Modern Comments, Assign Tasks, and @Mentions to streamline the collaboration experience. The company has also expanded the Exchange Online mailboxes and OneDrive cloud storage.

Security and compliance

In 2020 cyber-attacks were rated as the fifth top-rated risk, which is fast becoming the new norm across public and private sectors. This trend is expected to grow in 2021, with studies revealing 30% of all Canadian companies suffer up to 20 cyberattacks in a 12-month period. Microsoft has added new attack surface reduction capabilities to Microsoft 365 designed to help organizations and businesses minimize exposure to ransomware and other threats. Some of the specific security additions include:

  • Message encryption to help keep crucial data within the organization
  • Data loss prevention (DLP) for email and documents
  • Powerful compliance capabilities to eliminate or reduce risks and meet the increasing regulatory requirements
  • Built-in mobile device management (MDM) and Microsoft Endpoint Manager to enable admins to support remote and hybrid workforces

AI and automation

In the last ten years, Microsoft has integrated a set of AI capabilities on their productivity and collaboration applications that help organizations and teams achieve more with little. Some of the notable additions under this category include:

  • AI-powered innovations that empower users to be better presenters, designers, and writers
  • A cloud-powered solution that can automatically create charts, maps, and tables in Excel. The solution also helps sort out emails and eliminate clutter in Outlook.
  • AI-powered real-time translation, captions, and transcription solution that enables engaging and accessible collaboration and communication

Microsoft Is Adding Unlimited Dial-in Capabilities for Teams

In addition to the new price increases, Microsoft has also revealed it is planning to add unlimited dial-in capabilities for Teams meetings across its paid enterprise, business, frontline worker, and government suites over the next six months. The unlimited dial-in capabilities allow more people to dial in and join a Microsoft Teams meeting from anywhere and via any device. It is designed to enable the users to access a dial-in number and utilize Teams like Conferencing Bridge. This means that users won’t have to download the app to join meetings over the Internet.

What Is the Impact of the New Price Increases on Businesses?

The biggest impact of the new Microsoft 365 prices will likely be felt by SMEs owing to their inability to negotiate for bulk discounts. However, considering the value Microsoft 365 provides to a business, these fees are still manageable by all standards.

Final Thoughts

Undoubtedly, Microsoft has increased the value that Microsoft/Office 365 provides in the past decade, and a price increase like this was always on the offing. With many organizations and people adopting a new hybrid style of operations, we can only conclude that the future of Microsoft’s productivity suite is getting brighter.

If you have any questions or need help getting started with your Microsoft/Office 365 plans, contact 365 Technologies. Our certified, professional, and knowledgeable team of technicians and network administrators provides businesses and organizations in Canada with exceptional managed IT solutions at a reasonable, fixed monthly rate. Contact us today to learn more

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