By Ashley Triplett

The first of several significant commercial price increases from Microsoft for Office 365 since its launch a decade ago is occurring March 1, 2022.  Microsoft plans including business software subscriptions for Microsoft 365 Business (Basic and Premium), Office 365 (E1, E3, and E5), and more will be affected. Businesses that use these products should expect increased charges. 

These increases will apply globally with local market adjustments for specific regions. The good news is that the price increases will only affect commercial and business users, with no changes to pricing for education or consumers subscriptions.  

There is a silver lining, in March of 2022, Microsoft will be adding Audio Conferencing to all licenses that include Teams, which will include unlimited dial-in capabilities for Microsoft Teams meetings across the enterprise, business, frontline, and government suites. 

Here is the official Microsoft announcement of the price changes. 

Microsoft 365 Upcoming Price Changes Effective on March 1, 2022 

• Microsoft 365 Business Basic - from $5 to $6 per user 
• 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  

How Will These Changes Affect Managed Solution’s O365 Customers? 

• You may still add licenses to your current subscriptions and pricing will remain the same until December 31, 2022.
• Only Net New Subscriptions will be affected by the price increase on/after March 1, 2022.
• If you are intending to make a transition to any new licenses in 2022, we recommend adding at least 1 license before March 1, 2022 to lock in the current pricing until December 31, 2022.
• Managed Solution will be renewing subscriptions for all customers taking advantage of our Cloud Solution Provider program savings the beginning of 2022 to lock in the current pricing before March 1, 2022.  This will ensure your pricing and budget do not change until at least December 31, 2022.
• Microsoft will be moving all Legacy (existing) subscriptions to the new pricing platform December 31, 2022. We will be sending more information out on how the new prices and changes will affect our clients prior to December and will have available meeting times for Q&A.

Purchasing New Subscriptions after March 2022 – What You Need to Know

Starting in March, new all Microsoft 365 subscriptions must be purchased under the New Commerce Experience.   The New Commerce Experience is Microsoft new subscription platform where you will have 2 options when purchasing new subscriptions.  New Commerce Experience subscriptions are available to purchase now and currently qualify for promotions, outlined below.

The first option is to purchase an annual subscription.  Annual subscriptions will be at a lower price per seat; the subscription is billed 12 months in full at time of purchase, however, some customers may qualify for monthly termed invoicing under the annual commitment.  Annual subscriptions do allow you to increase your seat count at any time, but you may not decrease the number of licenses you purchased until the 12 months is met.  In addition, Microsoft is offering a 5% promotional discount for any new annual subscriptions purchase before March 31^st, 2022.

The second option is to purchase a monthly subscription.  Monthly subscriptions, under the New Commerce Experience, are 20% more than the monthly price of the annual subscription. Monthly subscriptions allow you to increase your seat count at any time, but you may not decrease the number of licenses until the end of each month.  Microsoft is offering a 16.7% monthly promotional discount for New Commerce Experience Monthly Subscriptions until June 30^th, 2022.

Very Important to Note: With the New Commerce Experience, Microsoft is enforcing its cancellation policy that states Cancellations are only possible within the first 72 hours of purchase with a prorated refund (proration is calculated daily).  This policy is enforced with both Annual and Monthly subscriptions, when a cancellation request is submitted after 72 hours of purchase, the cancellation will not take effect until the end of the Monthly Term or the Annual Term.

Restrictions:

• Microsoft has put a 2400 Seat limit per license type, this limit excludes Windows 365
• Promotions do not apply to Non-Profit, Academic or Government licenses.

Additional Microsoft Price Increases That Took Effect in 2021 

There was a quiet price increase for the Enterprise Mobility Suite and Intune licenses announced in July and the price increase took effect August 2021.  The new pricing will take effect when subscriptions are renewed at their annual term.  Managed Solution is sending out notices to our clients before the price increases take effect. 

Microsoft also implemented price increases to their Windows Server offering on September 1, 2021, Windows Server Standard, Win Server CAL, and Win Server RDS licenses all received a 10% price increase. 

 Open Licensing Program is Ending December 31, 2021 

As of January 1, 2022, commercial customers will not be able to buy new or renew software licenses or online services through the Microsoft Open License program. New license-only purchases should be transacted through partners in the Cloud Solution Provider program.  You will continue to have full rights and access to all perpetual software licenses acquired through the Open License program. There are currently no changes to the Open Value or Open Value Subscription programs.   

• You may receive a notice that you have an Agreement that is expiring, these notices are likely just for the Authorization number expiring. 

Managed Solution is happy to provide quotes for any licenses you need. We can offer great pricing on the new Software Perpetual licenses through the Cloud Solution Provider (CSP) program or if you are in need of Software assurance, we can quote the Open Value licensing as well. 

For more information on the Open Licensing Program changes, see the Microsoft official announcement here.  

Contact Us 

If you are a current licensing client and have questions, please reach out to our Cloud Team at o365@managedsolution.com

If you are new to working with Managed Solution, and want to learn more about how we can help you with your Microsoft licensing and other IT needs, please contact us at sales@managedsolution.com 

Want to help us petition against the Microsoft Price Increase?  Sign the Petition here.