Microsoft Price Increases Coming on March 1st

Microsoft announced in August 2021 that it will increase the cost of its Microsoft 365 Commercial subscriptions starting in March 2022.

Microsoft has started the transition process for the price increases that they announced last August. Microsoft is calling this their “New Commerce Experience” (NCE), and the honest truth is that licenses purchased through the Cloud Solution Provider (CSP) will be more expensive and businesses will not have as much flexibility as they have had in the past. After this change goes into effect, the subscription price for Microsoft 365 monthly subscriptions will increase by 20 percent, according to reports.

It is important to note that this 20 percent increase is in addition to the 15 percent price increase for Microsoft 365 commercial plans.

Microsoft Price Increases Coming on March 1st

Microsoft Office 365 Increases Prices for Monthly Subscriptions

As the price increase looms, Microsoft tried to soften the blow of their new pricing model by explaining that there has not been a substantial price increase since Office 365 was released in June 2011. Some wonder if Microsoft’s new pricing model will make the offerings of Microsoft’s biggest competitors more attractive, or if Microsoft will have a comeback to the opposing views of the new pricing model.

While there are a variety of situations that can unfold, business leaders can’t sit back and wait for anything to happen. Business leaders must take action now to determine what actions they should take to minimize the price increase and ensure business continuity. Microsoft has also been emphasizing discounts that will be available on high-tier subscriptions. Microsoft is also adding some new features in Microsoft Teams to take your mind off the upcoming price increase.

What’s Changing?

New base pricing starts on March 1st, 2022

  • Microsoft 365 Business Basic from $5 to $6
  • Microsoft 365 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
  • Microsoft 365 E3 from $32 to $36

More long-term contracts

The new pricing model is going to cost about 20% more if you are seeking the flexibility that a month-to-month contract offers. Contract terms of one and three years will be standard contracts. Along with the longer commitment, Microsoft’s New Commerce Experience will lock customers into a specified number of licenses. Customers have the option to increase their licenses, but they won’t be able to reduce the licenses until the renewal date.

There will be new license agreements

Microsoft subscriptions under New Commerce Experience will basically serve as a new contract, and customers will have to accept the terms of the new contractual agreement. Under Microsoft’s new pricing model, Microsoft is asking customers for a greater financial commitment, and Microsoft wants to make sure that everyone signs the agreement.

What Should Atlanta Businesses Do Now?

Teamspring has been clarifying the variations of Microsoft’s new pricing model as they relate to both short-term and long-term planning in order to plan for future growth. Making smart decisions about a course of action begins with understanding the situation. Over the past two years, many businesses have been pushed into the cloud quicker than planned. Now it’s time to review how the cloud is working and what you are paying. Are you paying for licenses and storage you no longer need?

  • Review your existing Microsoft licenses to make sure that you know how many licenses you will need to migrate to the New Commerce Experience model.
  • Consult with your managed services provider about the New Commerce Experience and find out if your business can take advantage of discounts that Microsoft is offering on yearly subscriptions before March 1.
  • Talk with a vCIO about the long-term impact of Microsoft licensing on your business. A vCIO will help you determine if your business needs a one or three-year contract, or if your business needs to have multiple month-to-month licenses to handle short-term changes.

Microsoft’s new pricing model has received pushback on multiple forums from its partners, Microsoft 365 users, as well as business leaders who are running businesses of small, medium, and large sizes. The pushback against Microsoft’s new pricing model resulted in several meetings between Microsoft and its partners, but the changes will still go into effect on March 1.

Do you think that this new pricing model will impact Atlanta businesses that are still dealing with the ongoing effects of the COVID-19 pandemic? As a local Microsoft partner, we’re helping our clients adapt to the changes and navigate the New Commerce Experience so that they can find a balance between costs and flexibility. If you have not received the support and guidance you need from your IT support or managed service provider (MSP), now is a good time to look elsewhere.

Teamspring Is Here to Help Atlanta Businesses Navigate the Changes

Teamspring is here to assess your Microsoft 365 system to help you optimize your current environment and determine if another plan will yield better results before the price changes on March 1 increase your costs. Our team will leverage our knowledge and expertise as a Microsoft Partner to enable you to better understand your current position and how your current Microsoft subscription impacts your return on investment (ROI), and take a deeper look into your processes to uncover any pain points you may have missed.

After we assess your Microsoft 365 system, we will help you design a strategy that outlines your business objectives against security, compliance, and IT infrastructure worries to allow you to be better prepared for the long-term, and determine which plan would work best for you. Although Teamspring is a Microsoft Partner, we ask that our clients please understand that the pricing increase that will go into effect next month is beyond our control. However, we are always dedicated to helping our clients with continuous support, and that will never change.

Contact us today to find out how Teamspring creates Microsoft 365 cost savings to make Atlanta business’s IT budgets go further.

Thanks to our colleagues at Velocity IT, a top Dallas IT company for their insights into this information.