Microsoft 365 Subscription and Pricing Changes

What is a Microsoft 365 Subscription?

A Microsoft 365 subscription is a suite of applications and cloud services. Each user has a Microsoft 365 subscription which gives access to some or all of the following, depending on the type of subscription they have; a company email account, Office software (Outlook, Word, Excel, etc), OneDrive, SharePoint, and Teams. Subscriptions are invoiced per user, per month.

Microsoft’s Price Increase

Microsoft have given advanced notice of a price increase which takes effect from 1^st March 2022. The price increase will apply to all Customers and will be between 15% to 20% on certain subscriptions only. Affected subscriptions include; Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, Office 365 E3, Office 365 E5 and Microsoft 365 E3.

We understand this is a substantial increase but unfortunately this has been imposed upon all Microsoft partners, and therefore we have to pass on this increase on.

Microsoft’s Current Subscription Model

All Microsoft 365 subscriptions can be increased and decreased each month, in line with your company users.

Microsoft’s New Subscription Models

Yearly Subscription Model

• Customers must agree to a 1 year commitment for their Microsoft 365 subscriptions.
• Only increasing license numbers is allowed; you cannot decrease licenses until the end of the year.
• Pricing can be “locked in”; you can lock in the pricing of each subscription for the whole year.
• If signing up on this model prior to 1^st March, you will avoid the price increase (for 1 Year).
• Yearly subscription model can still be paid for monthly.
• Each user can upgrade to a higher subscription, but not downgrade until the end of the year.

Rolling Monthly Subscription Model

• Customers are not tied into a lengthy commitment; rolling 30 day commitment.
• For the flexibility of this model, Microsoft will increase the cost of all subscriptions by 20%. Note this is separate to the price increases on certain subscriptions which happens on 1^st March 2022.
• Subscription quantities can be increased and decreased each calendar month.
• Comparable to the current model.

Other Points of Note

• Microsoft will allow customers to have a mix of Yearly and Rolling Monthly subscription models.
• Non-profit and Education licenses will not be affected by any of these changes or the price increase in March.

Next Steps for Our Existing Customers

• These changes are evolving, we will continue to update all of our customers.
• In January 2022 we will reach out to all customers directly and give them the options for their business. We will need a decision on this before 8th February 2022 so that we can prepare any changes for your business.
• In the meantime, if you have any questions about these changes, please reach out to your Account Manager.