You may have heard that Microsoft have decided to increase their pricing models for their Office 365 (amongst others) products. So what exactly has been announced so far, what model are they adopting and when is it happening?

There is still some confusion over what the new pricing models will look like for Office 365 as even though Microsoft announced this back in August 2021, they have yet to confirm exactly when this is happening and by how much.  In fact, UK pricing hasn’t been released yet, so when we talk about the figures further into this blog we will be basing the figures on indicative US pricing increases.

So what is Microsoft’s justification for the price rise?  Well, in a nutshell they say that they have invested heavily into Office 365 over the past decade, and have not put the pricing up.  It is true that Microsoft have added lots of extra value for money to their 365 offerings over the past ten years.   You only need to look at how Microsoft Teams has developed and has been widely adopted by many businesses, large and small.

Microsoft’s new pricing model will mirror what you would find with Netflix, or Disney+ for example.  Essentially you will be signing up for a yearly contract (or longer if you want to) but pay for the licences monthly.  One thing you need to be aware of though, is that if you sign up for a yearly deal, you can add licences onto that deal, but you cannot remove.  So, if for example a member of staff left and you decided not to replace them, you would be liable to pay for that unused licence for the remainder of the deal.

Whilst UK pricing remains a little vague, Microsoft have announced that pricing will be rising anywhere from 20% – 35% depending on what licences you have.  This will translate into roughly a monthly increase of 75p – £2.90 per license, again depending on what licences you have.

The expected start date for this price rise is currently the 1st of March 2022.

As this is still a developing situation, we will keep a close eye on any announcements that come from Microsoft and we will keep all of our customers up to date via email.