Microsoft 365 price increases


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For those that haven’t seen, Microsoft have announced increases to the list pricing of Office/Microsoft 365 that will take effect from March 2022. The new per user per month pricing will be:

  • Microsoft 365 Business Basic (from $5 to $6)
  • 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)
  • Microsoft 365 E3 (from $32 to $36)

Note, there are no prices increases for Microsoft 365 E5 or the “F” SKU products. Microsoft have stated that they “want to make it more economically transparent that E5 represents the best value” and that this increase reduces the gap between M365 E3 and E5.

While price increases are never anyone’s favourite thing, and a 25% increase for E1 is certainly pretty sizeable – my main feeling is that, actually, this isn’t the end of the world or VENDOR LOCK-IN writ large. These are the first such price increases in about a decade and I don’t think that they are unreasonable or an example of Microsoft abusing their position or their customers.

In a nutshell, Microsoft have added a LOT of stuff to O/M365 over the years and it is better than it used to be. Microsoft say they have added 24 new apps and over 1,400 new features since Microsoft 365 was introduced. These include:

  • Teams
  • Stream
  • Yammer
  • OneDrive
  • Visio

Microsoft also include the Power Platform apps but, as they’re relatively new and pretty limited without extra licensing, I’m not sure how much value they’re adding right now tbh.

Taking Teams as an example, it is miles ahead today of Teams on Day 1 as so many new features and capabilities have been added. I’d say that most customers have probably found an extra $2-$4 (pupm) value from the additions over the years…if you’ve started using OneDrive or Teams for example.

Product Utilisation

Often, people will say something like “no-one is using every feature in their subscription” as a “gotcha” in these cases – that’s absolutely true and will always be the case. No person or organisation will ever use every feature in everything – and they don’t have to. An organisation simply needs to use enough of a product that it adds value to their business by helping them do something new/faster/better etc.

I haven’t watched everything on Netflix and I never will, but as long as I keep watching enough each month, and they keep adding new content, that I’m getting value – that’s fine. It’s well known that product adoption can be more difficult that expected for organisations, and it often becomes more difficult the larger the user base. That said, if an organisation truly hasn’t seen an increase in value that far outstrips this price increase, a review of what they’re buying and how they introduce new software to their users is urgently required.

Setting a precedent?

All this said – if these price increases become a regular thing from Microsoft – every 1 – 3 years for example – then my tune will surely change! However, if they continue to add new apps and features and keep price increases few and far between (and at a reasonable level) – it seems fair enough to me if I’m honest.

However, doing it a month after announcing almost $70 billion annual operating income isn’t the greatest timing! While I think the principle is sound, if you can make that much money…do you really need to increase the price? Just because you can doesn’t mean you should…

For end user organisations, this is absolutely a great opportunity to review your Microsoft spend and strategy though.

  1. Take a look at what you’re buying and compare that to what you’re using. If the gap is too big, work out what changes can be made and when, depending on your contract.
  2. Start to define your negotiation strategy – can you work with MS to get a deeper discount to (partially) offset these price increases? Be wary however, of what you might have to commit to in order to get them…it’s likely they’ll be pushing M365 E5 pretty hard.
  3. Get external help from partners and consultants to help you make the best decisions as quickly as possible.

Windows 365 pricing revealed


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Now that Windows 365 has hit General Availability, Microsoft have also listed the public pricing online.

Pricing is per user per month and ranges from $20 to $162, the entry level giving you:

  • 1vCPU/2GB RAM/64GB storage

and the most expensive providing:

  • 8vCPU/32GB RAM/512GB storage

You are able to upgrade to a more powerful machine by “resizing” however, the ability to downgrade the machine is not currently available.

Microsoft also make it clear that Azure Bandwidth charges (see them here) will apply on top of any Windows 365 Enterprise charges. For the Business version, there is a monthly per user outbound data cap that ranges from 12GB to 70GB, depending on your plan.

Furthermore, Windows 365 Enterprise requires license pre-requisites including:

  • Windows 10/11 Enterprise
  • Intune
  • Azure AD P1

but Windows 365 Business has no such requirements – it is a standalone offering.

Windows 365 also introduces a new term “Windows Hybrid Benefit” (not to be confused with “Azure Hybrid Benefit”).

Windows Hybrid Benefit (WHB)

Applicable to Windows 365 Business (the sub-300 license offering), this gives a discount of up to 16% for users who are the primary user of a Windows 10 Pro device – that is also their primary work device. Said device must be accessed at least once during the license subscription term.

Here’s a screenshot of the full range of pricing for Windows 365 Business. Although WHB says it can save up to 16%, you can see below that all the WHB prices are simply $4 per user per month cheaper.

Windows 365 Plans and Pricing | Microsoft

The pricing for Windows 365 Enterprise is:

Windows 365 Plans and Pricing | Microsoft

Further Reading

Windows 365 Pricing

Windows 365 FAQ

Microsoft Office 2013 price increases & license changes


The upcoming 2013 release of Microsoft’s Office suite & the related products brings with it not just great new features but also price increases.

The affected products and the expected increases are:

  • SharePoint Server +38%
  • SharePoint 2013 Standard User CAL +15%
  • Exchange 2013 Standard and Enterprise User Cals +15%
  • Visio Standard 2013 +20%
  • Visio Pro 2013 +5%
  • Project Standard 2013 and Professional 2013 +5%
  • Project Server 2013 +15%
  • Lync Server +400%

An increase in price when a new version is released is quite common, with most manufacturers, but coupled with the December 1st 15% increase on user CALs and just 6 months after the up to 30% price rise relating to the Euro/GBP levelling – I do not anticipate this being well received by customers!

The big takeaway from this is *If you’re looking at purchasing these products, look at the cost of buying now with SA (as well as the extra benefits) compared to the projected costs from December onwards*.

There are also a number of licensing changes about to take effect:

Lync

Lync Server Std & Enterprise are merging into 1 SKU, with a price of around £2000+ – a significant increase over the current Lync Std price. This does bring the failover & load balancing features to all Lync 2013 organizations.

Sharepoint

Microsoft have, in many areas, moved to simplify licensing and SharePoint is another area.

FAST Search Server & Search Server are no longer separate entities, they’re now simply part of SharePoint Server 2013.

A big one here, SharePoint for Internet Sites is no more. Microsoft have done away with the (up to) £30,000+ license, which was required for external user access to SharePoint content, and rolled those licensing rights into the standard server license. From the October Product Use Rights (PUR) document:

“CAL WAIVER FOR USERS ACCESSING PUBLICLY AVAILABLE CONTENT
CALs are not required to access content, information, and applications that you make publicly available to users over the Internet (i.e., not restricted to Intranet or Extranet scenarios).”

I imagine that this will partially contribute to the increase in price we’re seeing with 2013.

Exchange

Basic Anti-Malware protection will be baked into Exchange Server 2013

External Connectors

External connector licenses have been removed for both Exchange 2013 & Lync 2013. Again from the October 2012 PUR:

“External User Access: Licensed with Server”

Visio

Again in a move to simplify the SKU line up and make it easier for customers to make the right selection, Visio Premium is being discontinued and all it’s extra features will be moved into Visio Pro 2013.

Software Assurance

Organizations who purchased any products that are due to be discontinued along with Software Assurance need not worry, your benefits will continue and you will receive access to the relevant 2013 version.

Office 365

Something that Microsoft have not mentioned much at all and have in fact been reluctant to discuss, is that Visio & Project are being made available online via Office 365. This will be of big benefit to many customers, enabling easier collaboration among staff no matter their location.

Another benefit of this may well be around Software Asset Management (SAM). It’s common to see organizations over licensed for Project & Visio, Office 365 may make it easier for them to track how many licenses they have and who they are assigned to.

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