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.

Microsoft Product Terms August 2021


We have confirmation of Windows 365 Enterprise base license requirements:

  • Windows 10 Enterprise
  • Intune
  • Azure AD P1

and the bundles that count too:

Microsoft 365 F3/E3/E5/A3/A5/Biz Prem/Student Use

Microsoft note that swapping a user’s Win365 license (by “resizing”) is not “license reassignment” and so can be done as frequently as required.

Also, you can’t use it for “digital asset transaction validation workloads” (aka Bitcoin mining I assume).

We also get confirmation that Windows 365 Business has no license pre-requisites (unlike Enterprise) although Windows 365 Business w/Windows Hybrid Benefit requires a Windows 10 Pro primary device (which is used periodically).

Azure Arc SQL has been added and Hybrid Benefit can be used…but prevents use on Listed Providers infrastructure.

There is a $0 license offer for Azure Virtual Desktop (until December 31, 2021) where you “serve Azure Virtual Desktop Customer Solutions to third parties on Azure”.

Microsoft Product Terms site is here.

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

Windows Server 2022: New release model


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Microsoft have updated the release model for Windows Server 2022. There will no longer be a Semi-Annual Channel, instead there will only be the Long Term Servicing Channel (LTSC). A new version of the LTSC will be released every 2-3 years, and each release will receive 10 years of support – 5 mainstream + 5 extended.

They state the focus of the Semi-Annual Channel was innovation around containers and microservices and that this work will continue within Azure Stack HCI instead.

Further Reading

Microsoft Docs page

Microsoft Financial Results FY21


$168.1 billion.

That was Microsoft’s revenue for FY21, which ended June 30, 2021, and it is a pretty staggering number! In fact, it’s about 40% bigger than the revenues of Oracle, SAP, and IBM combined!

Equally impressive was their Operating Income number of $69.9 billion but let’s dive a bit deeper and look at the numbers for Q4 FY21 (April – June 2021).

Q4 FY21

Overall for the final quarter, Microsoft saw:

  • Revenue = $46.2 billion – up 21%
  • Operating Income = $19.2 billion – up 42%

(As a comparison – Microsoft’s Q4 revenue was bigger than the individual total year revenue for both Oracle and SAP!)

Productivity & Business Processes

This division had revenue of $14.7 billion, an increase of 25% and within that:

  • Office 365 Commercial increased 25%
  • LinkedIn increased 46%
  • Dynamics 365 increased 49%

Intelligent Cloud

Here Microsoft saw revenue of $17.4 billion, a 30% increase, which was mainly driven by a 51% increase in Azure revenue.

More Personal Computing

This section saw a 9% increase to $14.1 billion with Windows Commercial products rising by 20%; however – Surface revenue dropped 20%…likely impacted by the ongoing chip shortage.

Other areas

The investor calls and information can give great insights beyond simply revenue figures, some of these tidbits include:

  • Another increase in long term Azure deals
  • Office 365 E5 comprises 8% of the total commercial installed base
  • Almost 250 million monthly active users on Teams
  • Almost 80 million monthly active Teams phone users
  • Over 1 billion Teams calls in a single month
  • Almost 600,000 orgs using Microsoft security products – with a 70% increase in SMB

Microsoft continue to grow and Satya Nadella seems confident they will be able to keep this up going forward. It certainly feels that there is a lot of expansion space available for Microsoft across several product areas – both winning business from rivals but, probably more so, creating brand new sectors in the cloud and across business applications too.

Further Reading

Microsoft Investor Info

Dynamics 365 in Microsoft Teams


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Another announcement at Microsoft Inspire is that soon users will be able to view and interact with Dynamics 365 records and data directly inside Microsoft Teams – without requiring additional licensing.

In a blog post, Microsoft state that they are “eliminating the licensing tax” that has previously prevented organisations from integrating Dynamics 365 & Microsoft Teams. There isn’t a huge amount of additional information available yet so the specific questions as to what data can be shared and what can be done to it etc. will have to wait for another day. This blog from Jukka Niiranen attempts to uncover some potential insights from the Microsoft demo video that’s available.

However, it is clear that this is (another) shot at Salesforce in Microsoft’s efforts to make Dynamics 365 the #1 CRM system out there. It also serves to further Teams’ growing position as the central hub for users throughout their work day, where they’re able to do most things at this point (but no email).

Further Reading

MS announcement

MS site (with demo video)

Jukka Niiranen blog

Microsoft extend Extended Security Updates


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Extended Security Updates (ESUs), available for Windows Server 2008/R2 and SQL Server 2008/R2, were introduced in 2019 to extend available security support for 3 more years beyond the end of the products’ extended support periods.

It’s now less than 12 months until the end of the ESU period for SQL Server 2008/R2 and Microsoft have announced they will be providing 12 additional months of cover – but only for workloads running in Azure. This will also apply to Windows Server 2008/R2 – the end of ESU dates are:

  • SQL Server 2008/R2 – July 12, 2022
  • Windows Server 2008/R2 – January 10, 2023

End of support for 2012 Server versions

They have announced the availability of ESUs for the 2012/R2 releases of SQL Server and Windows Server. Extended Support for these ends:

SQL Server 2012 – July 12, 2022

Windows Server 2012/R2 – October 10, 2023

It’s now less than 12 months until SQL Server 2012 goes out of support so if you’re using that within your organisation, you need to come up with a plan to:

  • Upgrade on-premises
  • Migrate to Azure for free ESUs
  • Budget to purchase on-premises ESUs

See more info from Microsoft here.

Microsoft announces Windows 365


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A new member of the 365 family has joined us – alongside Office 365, Microsoft 365, and Dynamics 365 – we now have Windows 365.

Formerly known as Cloud PC, this latest offering enables you to stream an entire PC – including the OS, apps, and settings – from the cloud to any device. This means Windows 10 and 11 will be easily available on any device – including MacOS and Linux.

Although clearly driven by the COVID-19 pandemic and the rapid, global shift to hybrid working, something like this has been a long time coming in many regards. It’s also driven by the changing security landscape…Microsoft also see this as a way to help organisations combat the rise of security threats – let Microsoft take care of securing your desktops so you don’t have to.

Although specific pricing information hasn’t been released yet, it’s expected there will be a range of pre-set options, making it more of an “off the shelf” SaaS offering than the current Azure Virtual Desktop (AVD). Different SKUs and plans will offer different amounts of storage, processing power, memory etc. for organisations to choose from, with Satya Nadella stating this offering would be applicable to businesses of any size.

Options available

Get started with Windows 365 – Microsoft Tech Community

Licensing requirements

Users with Windows Pro endpoints require:

  • Windows 10 Enterprise E3 + EMS E3

while users with non-Windows Pro endpoints require:

  • Windows VDA E3 + EMS E3

Alternatively, both scenarios can be covered by licenses for:

  • Microsoft 365 F3/E3/E5/Business Premium

Technical requirements

It’s not quite as straightforward as just having those licenses, you will also need:

  • Azure subscription
  • Azure Virtual Network
  • Azure Active Directory sync
  • Certain ports open

to ensure that everything works optimally.

More information on the requirements and how to provision can be found here.

Finally…

Not surprisingly, there will be 2 flavours available:

  • Windows 365 Business
  • Windows 365 Enterprise

and it is set to launch on August 2, 2021. I look forward to seeing more information as it becomes available…and hopefully trying it out myself!

Update

While Microsoft are yet to announce official pricing, pricing for 1 SKU has been revealed. For a desktop with 2vCPU/4GB RAM/128GB storage it will $31 per user per month ($372 per year) – which strikes me as quite expensive…

Further Reading

Microsoft announcement

Windows 365 page

Technical requirements

Microsoft Product Terms: July 2021


Microsoft 365 Education Insights Premium listed as an add-on for Office 365 A1/A3/A5 and Microsoft 365 A3/A5

The “Third Party re-imaging clause” has been added to the Microsoft Customer Agreement (MCA), although I’m not 100% sure why at the moment.

Windows “Get Genuine” licenses have been added to the Microsoft Customer Agreement – is this related to the above addition perhaps?

Various terms and clauses updated – including one which clarifies that Azure Virtual Desktop (AVD) access rights in Window 10 licenses are limited to customers’ own tenant.s

M365 E5 security/compliance add-ons removed as pre-requisites for Premium Assessments.

Professional Direct Support added for Power Platform. Licenses must be acquired for every Dynamics 365 and Power Platform license on the agreement – but has a maximum of 250. Any licenses above that are covered without additional licenses being required.

Microsoft Power Apps price reductions


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Microsoft announced on July 1, 2021 that they’re cutting the price of Power Apps in half(ish) from October 1, 2021.

Power Apps per User

This was $40 per user per month but will be $20 from October 1, 2021.

Power Apps per App

This was $10 per user per app per month but will $5 from October 1, 2021. However, it should be noted that the features have been reduced too – currently it gives access to:

2 x Apps and 1 x Portal

But under the new rules, each license will allow access to:

1 x App or 1 x Portal

Meaning certain scenarios may not see a real price reduction.

Customers with licenses purchased before October 1, 2021 will retain the current entitlements until renewal.

For organisations looking to purchase before October 2021, there are two promotions which have been extended:

Power Apps per user Promo

$12 per user per month with a minimum purchase of 5,000 licenses.

Power Apps per app Promo

$3 per user per app per month with a minimum purchase of 200 licenses.

There is also promotional pricing available for Power Apps Portals login capacity – both for Tier 4 (25,000+ logins per month) and Tier 5 (100,000+ logins per month).

Microsoft’s announcement is here.