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Microsoft 365 price hikes coming

Software giant gives six months’ notice of the first price rises since it launched the product suite a decade ago

Microsoft has signalled that business is getting back to normal with the announcement of the first price increases for its 365 products.

During the pandemic, users have been given free access to software for certain periods and a chance to delay payments, but it is clear that life is getting back onto a more normal footing and vendors are confident enough to consider raising prices.

Microsoft has given its channel and customers plenty of notice of price changes, with increases coming into effect from 1 March 2022.

In a blog post, Jared Spataro, corporate vice-president for Microsoft 365, explained the rationale for the increases and pointed out that the vendor had resisted making a move for quite a while.

“We are announcing changes to our commercial pricing for Microsoft 365 – the first substantive pricing update since we launched Office 365 a decade ago,” he said. “This updated pricing reflects the increased value we have delivered to our customers over the past 10 years.”

From March next year, certain commercial products will have price increases, including Microsoft 365 Business Basic (from $5 to $6 per user), Microsoft 365 Business 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), and Microsoft 365 E3 (from $32 to $36).

The rises will be applied globally, but education and consumer customers will not be subject to the changes.

Spataro used his blog post to talk about the growth of Microsoft 365, to about 300m paid commercial seats, and the investments the vendor had made back into the offering.

He highlighted 24 apps that had been added with Teams, Power BI, Planner and Whiteboard as some of those investments.

Microsoft Teams has become one of the collaborative platforms to see explosive growth during the pandemic and now has more than 250 million monthly active users. Spataro also underlined the efforts made to improve security and compliance.

“Since we first introduced Microsoft 365, we have added new attack surface reduction capabilities to help organisations defend against ransomware and other threats,” he wrote. “We have added capabilities like data loss prevention (DLP) for email and documents, sensitivity labels, and message encryption to help keep important data within the organisation.”

Spataro said the price rises were coming at a time when hybrid working was emerging and Microsoft wanted to position itself as a facilitator for those looking for collaboration and comms tools.

“As leaders around the world look to empower their people for a more flexible, hybrid world of work, it’s clear that every organisation will need a new operating model across people, places and processes,” he said. “We are committed to building on the value we’ve delivered over the past decade to continuously provide innovation that helps our customers succeed and thrive today and well into the future.”

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