What Should We Know About the Upcoming Microsoft Office 365 Price Increase?

Microsoft 365 is one of the most popular cloud productivity platforms in the world. There are now more than 300 million commercial paid seats, and many companies use the platform for everything from business email to team messaging to document and spreadsheet creation.

Since it came out as Office 365 over a decade ago (then renamed to Microsoft 365 for most plans), it has grown quite a bit, and multiple new apps and capabilities have continued to be added. 

Apps like OneDrive for cloud storage and Microsoft Teams for video, chat, and audio calls have become just as vital to companies as the original Office apps (Word, PowerPoint, Excel, Outlook).

Many of these features and new applications have been added without any significant price increase, but the bill is about to come due for many business and enterprise users.

Microsoft announced a price increase is planned for Microsoft 365 and Office 365 Enterprise in the new year. 

We’ll go through the most frequently asked questions and answers to tell you everything you need to know to be properly prepared before the increase hits.

When Is the Price Increase Happening?

Microsoft will increase pricing for some Microsoft 365 and Office 365 plans on March 1, 2022.

It initially announced the increase on August 19th of this year to give companies time to prepare their budgeting.

Which Microsoft Office 365 Plans Are Being Increased?

First, we’ll let home and education users breathe a sigh of relief… you’re not being impacted by this increase. For now, your prices will stay the same.

If you have Microsoft 365 Business Standard, you are also spared from this price increase.

Here are the plans that will be increasing on March 1st:

  • Microsoft 365 Business Basic, Premium, and E3
  • Office 365 E1, E3, and E5

These are the only plans named in the price increase announcement.

How High Are Prices Being Raised?

Depending upon your subscription plan, you’ll see an increase between $1 per user/month and $4 per user/month.

Here is a breakdown of the increases by plan:

  • Microsoft 365 Business Basic: Going from $5 to $6 per user (+$1)
  • Microsoft 365 Business Premium: Going from $20 to $22 per user (+$2)
  • Office 365 E1: Going from $8 to $10 per user (+$2)
  • Office 365 E3: Going from $20 to $23 per user (+$3)
  • Office 365 E5: Going from $35 to $38 per user (+$3)
  • Microsoft 365 E3: Going from $32 to $36 per user (+$4)

Why Are Prices Increasing?

While you may immediately suspect that the increase is due to inflation, like everything else right now, it’s an increase that has been strategically planned for a while, even before it was announced last August.

Microsoft provides several reasons for the need to increase subscription prices at this time. They fall mainly into two categories – added value and added security.

New Security Features Continue to Be Added

Due to the ever-more-sophisticated threat landscape, Microsoft has had to spend a lot on security and compliance features over the years. It also continues to increase capabilities to help companies keep their cloud assets better protected.

Some of the security additions added over the years include:

  • Sensitivity labels (allows for persistent document security policies and protections)
  • Data loss prevention
  • Mobile device management
  • eDiscovery
  • Message encryption
  • Core Litigation Hold

Expanded Team Collaboration & Virtual Meeting Capabilities

Microsoft has been on the cutting edge of team collaboration and enabling more effective virtual workspaces. It has enhanced MS Teams significantly over the years adding things like Together Mode, VoIP phone system capabilities, and automatic captioning and translations.

Due to the pandemic and the change that has brought about in the way we work and connect with clients; you can expect Microsoft to continue expanding in this area.

Multiple Apps Added to the Platform

When Office 365 first came out, it had just a handful of apps. Companies mainly subscribed to get cloud versions of the Office applications.

Since that time Microsoft Office 365 has added over 24 new applications, providing companies with even more value. Many of these apps can replace other cloud services that companies may have been using for things like video meetings, webinars, or online appointment bookings.

Just a few of the many applications added to Microsoft 365 over the years include:

  • OneDrive
  • Teams
  • SharePoint
  • Bookings
  • Forms
  • Lists
  • OneNote
  • Yammer
  • Visio for the Web
  • ToDo 

Most of these have been added without any additional price increase at the time.

Are You Getting Full Value from Your Microsoft 365 Plan?

Are you paying for 3rd party apps that you don’t need because you hadn’t realized your Microsoft 365 plan had the same capability? Cloudadvize can work with your Dallas-Fort Worth business to help you optimize your M365 workflow and take full advantage of all your digital tools.

Contact Cloudavize today for a free consultation to get started.