Microsoft announces price increases for Microsoft 365

If you’re a business using Microsoft 365, it will cost you more. But at least you don’t have to worry about it until next year. Microsoft is raising prices for its popular Microsoft 365 productivity suite, noting it is “the first substantive pricing update” since Office 365 was launched in 2011. Here’s how the price increases for Microsoft 365 and Office 365 shape up:

  • Microsoft 365 Business Basic, from $5 to $6 per user (or 20%)
  • Microsoft 365 Business Premium, from $20 to $22 (10%)
  • Office 365 E1, from $8 to $10 (25%)
  • Office 365 E3, from $20 to $23 (15%)
  • Office 365 E5, from $35 to $38 (9%)
  • Microsoft 365 E3, from $32 to $36 (13%)

Microsoft says that there are no changes in pricing for consumer and education products but adds the caveat “at this time.”

Even though it is just a few dollars per user (although in some cases, most notably Office 365 E1, the percent of the hike is high), the increase will bring a flood of revenue to Microsoft. According to the company, there are more than 300 million commercial paid seats for Microsoft 365.

In Microsoft’s defense, the company has loaded up Microsoft 365 with tons of new apps and functionalities over the past few years, especially since the COVID-19 pandemic started. Microsoft Teams, which has become a red-hot product in the workplace collaboration sector, was added as a free add-on to Microsoft 365 (then known as Microsoft Office 365) in 2017.

Jared Spataro, corporate vice president for Microsoft 365, points out that “since introducing Microsoft 365 we have added 24 apps to the suites — Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard.” Microsoft Teams especially has received continual upgrades with new functionalities almost weekly. Spataro also said Microsoft has released more than 1,400 new features and capabilities in the key areas of communication and collaboration, security and compliance, and artificial intelligence and automation that were incorporated into Microsoft 365.

The price increases for Microsoft 365 and Office 365 products go into effect on March 1, 2022.

Featured image: Shutterstock

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