On March1, 2022, the pricing method for Microsoft 365 subscriptions will change. The impact will be twofold for customers of the collaborative suite.
- The mode of engagement is changing.
- Prices are increasing significantly.
#1 New Microsoft 365 Pricing: Commitment Mode
If you are a CSP (Cloud Service Provider) customer, which is the case if you purchase your licenses from SmartView, you have the ability to adjust your license volumes up or down at any time to accommodate growth/decrease in headcount or changes in your needs/usages, all while benefiting from Microsoft's annual commitment pricing (no flexibility surcharge)
You now have several options:
- Monthly commitment: This is the most flexible commitment mode, you have the possibility to change your license volumes every month (be careful, any month started is due). It is also the most expensive mode (20% surcharge compared to the annual commitment price). In this mode, you also have no price lock-in which can change from one month to another.
- Annual commitment: This commitment mode is less flexible than the monthly mode. You can change your volume of licenses only upwards during the year (with an alignment and the possibility to reduce the volume only at the annual anniversary date or within 72 hours after the purchase). On the other hand, there is no surcharge and the price is locked in during the year of commitment. You can also smooth out the billing on a monthly basis.
- Three-year commitment: This type of commitment has the same characteristics as the annual commitment but offers the advantage of a price that is locked in for three years
#2 New Microsoft 365 pricing: Price increase
Microsoft 365 celebrated its 10th anniversary this year. Subscription prices have not changed substantially during these 10 years. The suite, on the other hand, has grown considerably. Originally, there was Outlook, OneDrive and the Office suite. Then many other products were made available. We can mention SharePoint, Teams, Planner, Forms, the Power Platform (Power BI, Power Apps, Power Automate).
On March1, 2022, prices for business subscriptions (not currently planned for individuals and the education sector) will increase significantly. This increase will be in the range of 10 to 20% depending on the subscription.
To date, the details of the announced price increases are as follows (converted to €):
Business Offers (less than 300 users)
- Microsoft 365 Business Basic (4.20 € / user / month to 5 €)
- Microsoft 365 Business Premium (16,90 € / user / month to 18,60 €)
Office 365 Enterprise offers (over 300 users)
- Office 365 E1 (6,70 € / user / month to 8,40 €)
- Office 365 E3 (19,70 / user / month to 22,70 €),
- Office 365 E5 (34,40 € / user / month to 37,30 €),
Microsoft 365 Enterprise Offers (with Windows 10 + Security Pack)
- Microsoft 365 E3 (31,50 € / user / month to 35,40 €)
* Source
Concrete examples
Here is an example of the impact of this increase. I am a CSP customer and my company has today 100 Business Basic licenses at 4,20 € / user / month. I pay € 420 per month for licenses.
Case number 1: You make an annual commitment before March1st. You benefit during 1 year from the rate of 4,20 € / user / month. You have a monthly bill of 420 € (which will increase to 500 € after one year).
Case number 2: You make an annual commitment after March1st. You have a monthly invoice of 500 € (5 € * 100 users).
Case number 3: You commit yourself monthly to benefit from flexibility. You have a monthly bill of about 600 € (5 € * 100 users * about 20% surcharge).
NB: Microsoft is still communicating on the subject and some information may change in the coming weeks. We will update this article accordingly.
Challenge your subscriptions
This price increase can be an argument to "challenge" the subscriptions you have subscribed to. It is possible that you can optimize your subscriptions.
The first and easiest optimization is going to be to determine if you have purchased more subscriptions than you need, which means that you have unassigned licenses. In this case, you can simply stop them.
The cheapest licenses are the ones you don't buy.
The second optimization can be to determine if some of your subscriptions are not fully utilized with respect to their potential and their options (ghost accounts, non-deployed or under-utilized products). This can allow you to either revise your license plan downwards or, on the contrary, to deploy new tools to "fully" use your subscriptions.
You can do this audit yourself or have a company specializing in the subject accompany you. At SmartView, we have developed 365Metrics, a tool that allows you to identify the licenses you are not using or that you are partially using and that allows us to make recommendations on the optimizations you can make.
