Microsoft 365 Subscription Changes in 2022

Microsoft Pricing Changes – What you need to know!

In August 2021, Microsoft announced across the board global pricing increases of between USD$1-$4 per user across the Microsoft 365 Business Basic/Premium, Office 365 E1/E3/E5 and Microsoft 365 E3 offerings.

On average, resellers expect roughly a 15-20% increase in baseline licensing and subscription costs across the board. These new prices are due to take effect from March 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).

These increases will apply globally with local market adjustments for certain regions.

New Commerce Experience licensing model

On top of the baseline pricing increase announced above, Microsoft is also moving licensing to its New Commerce Experience model. Under this model, subscribers who commit to annual or 3-year terms will avoid a new 20% premium that will be applied to monthly subscriptions.

Subscribers who lock into 12-month or 36-terms will have guaranteed pricing over that term with payment of the full term upfront.

Essentially the new model provides a 20% cost saving incentive over the annual term to counter the fact that there are no options to decrease seat counts during the term (although increases and upgrades are possible mid-term).

What does it all mean?

In short, you will be paying 15-20% more for licenses across the board from March 2022 onwards, and then whilst renewing your licensing for a 12 or 36-month term going forward won’t incur any additional cost, opting for monthly subscriptions will attract a further 20% premium.

Read the CNBC News Article on Microsoft Office 365 Subscriptions

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